JCPenney Reports Operating Earnings of 85 Cents Per Share
PLANO, Texas, Nov. 11 /PRNewswire/ -- J. C. Penney This article is about the department store chain. For its founder, see James Cash Penney. For the Irish retail chain branded Penney's, see Primark.
J. C. Penney Company, Inc (NYSE: JCP; most commonly known today by the name JCPenney or simply Company, Inc. (NYSE NYSE
See: New York Stock Exchange : JCP See Java Community Process.
JCP - Java Community Process ) today reported operating earnings Operating Earnings
Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue.
Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the quarter ended October 25, 1997, of 85 cents per share Cents per share
The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. as compared with $1.03 per share in last year's third quarter. Operating earnings exclude one-time costs associated with the Company's recently announced voluntary early retirement program and business integration expenses primarily related to drugstores. Including the effects of these expenses, net income was $113 million, or 40 cents per share (fully diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ).
JCPenney Stores and Catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C.
Operating profit Operating profit (or loss)
Revenue from a firm's regular activities less costs and expenses and before income deductions.
See operating income. for JCPenney Stores and Catalog was $420 million in the third quarter of 1997 compared with $431 million in the same period a year ago. For the quarter, sales declined by 0.8 per cent compared with third quarter 1996. FIFO (First In First Out) A storage method that retrieves the item stored for the longest time. Contrast with LIFO. See traffic engineering methods.
FIFO - first-in first-out gross margin as a per cent of sales increased 20 basis points compared with last year's third quarter. Selling, general, and administrative (SG&A) expenses were well managed during the quarter and were about even with the comparable period last year. Inventories are on plan and about three per cent below last year's levels.
Operating profit, including the effects of LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO.
LIFO - stack , for Eckerd totaled $64 million in the quarter compared with $51 million in last year's third quarter on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts.
The phrase pro forma basis, assuming the Company's drugstore acquisitions had occurred at the beginning of 1996. On a FIFO basis, operating profits were $72 million this year compared with $56 million last year. Comparable store sales increased 7.2 per cent for the third quarter. FIFO gross margin as a per cent of sales increased by 10 basis points compared with third quarter 1996 pro forma results. SG&A expenses continued to be leveraged, and for the quarter, improved by 40 basis points as a per cent of sales compared with last year. These results were achieved during a period of significant transition and integration activities. By the end of the quarter, all stores had been converted to the Eckerd format.
In the third quarter, operating profit for Insurance increased about 9 per cent over last year's comparable period on a revenue increase of 12 per cent.
Net Interest Expense and Credit Operations
Net interest expense and credit costs increased in the third quarter of 1997 due principally to higher interest costs associated with drugstore acquisitions.
Credit operating costs operating costs npl → gastos mpl operacionales , on a net basis, increased $6 million in the 1997 third quarter over the comparable period last year. Increases in finance charge revenue and lower credit operating costs substantially offset increases in bad debt. Net bad debt expense increased $20 million, or about 28 per cent, in this year's third quarter compared with the 1996 comparable period. Delinquency delinquency
Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rates and personal bankruptcies continue to be above plan.
Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and Business Integration Expenses, Net
During the third quarter of 1997, the Company recorded a $158 million pre-tax charge related to its previously announced voluntary early retirement program. Approximately 1,250 of the 1,575 eligible management associates accepted early retirement under the program. It is expected that the Company will realize ongoing, annual benefits of $85 to $90 million related to the retirements. In addition, the Company recorded other business acquisition and consolidation expenses totaling $32 million in the third quarter. These expenses were comprised principally of costs associated with the integration of the drugstore operations which were partially offset by gains on the sale of the remainder of the Company's consumer banking assets.
Commenting on the results, James E. Oesterreicher, chairman and chief executive officer, said, "The outlook for the fourth quarter is positive for each of our businesses. The integration of Eckerd has been substantially completed, margins as a per cent of sales in JCPenney Stores and Catalog have strengthened, and inventories are in good shape for the holiday season. Our management is committed to building shareholder value."
J.C. PENNEY COMPANY, INC. and Subsidiaries SUMMARY OF OPERATING RESULTS (Amounts in millions except per share data) 13 weeks ended 39 weeks ended Per Per Oct. 25, Oct. 26, Inc. Oct. 25, Oct. 26, Inc. 1997 1996 (Dec.) 1997 1996 (Dec.)
& catalog $ 4,926 $ 4,967 -0.8 $13,213 $12,922 2.3
drugstores 2,281 570 +100.0 6,896 1,574 +100.0 Insurance 233 208 12.0 686 601 14.1
& revenue 7,440 5,745 29.5 20,795 15,097 37.7
Margins and expenses
LIFO gross margin
& catalog 1,569 1,575 -0.4 4,080 4,007 1.8 Eckerd drugstores 469 125 +100.0 1,471 345 +100.0 2,038 1,700 19.9 5,551 4,352 27.6
& catalog 1,149 1,144 0.4 3,342 3,269 2.2 Eckerd drugstore 405 107 +100.0 1,197 296 +100.0 1,554 1,251 24.2 4,539 3,565 27.3
Operating profit (EBIT EBIT
See: Earnings Before Interest and Taxes
See earnings before interest and taxes (EBIT). )
& catalog 420 431 -2.6 738 738 0.0 Eckerd drugstores 64 18 +100.0 274 49 +100.0 Insurance 51 47 8.5 157 136 15.4 Other unallocated 5 7 N/A 34 42 N/A
profit (EBIT) 540 503 7.4 1,203 965 24.7
Net interest expense
operations (152) (92) 65.2 (355) (177) +100.0
interest (14) -- N/A (72) -- N/A
expenses (190) (34) N/A (217) (34) N/A
Income before income
taxes 184 377 -51.2 559 754 -25.9 Income taxes (71) (141) -49.6 (217) (283) -23.3 Net income $113 $236 -52.1 $342 $471 -27.4
Operating earnings per
expenses, net -
fully diluted $ 0.85 $ 1.03 -17.5 $ 1.76 $1.97 -10.7
per share -
fully diluted $ 0.40 $ 0.95 -57.9 $ 1.25 $ 1.89 -33.9 13 weeks ended 39 weeks ended Oct. 25, Oct. 26, Oct. 25, Oct. 26, 1997 1996 1997 1996
SEGMENT FINANCIAL DATA:
Comp stores sales
JCPenney stores -2.5 6.2 1.2 2.1 Eckerd drugstores 7.2 6.8 7.5 8.1
FIFO gross margin as
a percent of sales
& catalog 31.9 31.7 30.9 31.0 Eckerd drugstores 21.0 20.9 (a) 21.6 21.6 (a)
LIFO gross margin as
a percent of sales
& Catalog 31.9 31.7 30.9 31.0 Eckerd drugstores 20.6 20.6 (a) 21.3 21.4 (a)
SG&A expenses as
a percent of sales
& catalog 23.3 23.0 25.3 25.3 Eckerd drugstores 17.8 18.2 (a) 17.4 18.0 (a)
Operating profit (EBIT)
as a percent of
& catalog 8.6 8.7 5.6 5.7
(FIFO) 3.2 2.7 (a) 4.2 3.6 (a)
(LIFO) 2.8 2.4 (a) 3.9 3.4 (a) Insurance 21.9 22.6 22.9 22.6
diluted shares 270.7 248.8 267.6 248.1
net income $ 0.40 $ 0.98 $ 1.25 $ 1.93
shares 251.9 229.2 248.7 228.3
expense & credit
revenue $ 156 $ 148 $ 501 $ 465 Credit costs (161) (147) (431) (398)
net (147) (93) (425) (244) Net $ (152) $ (92) $ (355) $ (177) Delinquency rate 4.8 4.1
tax rate 38.6 37.4 38.9 37.5
Customer receivables Receivables
An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed
services 4,375 4,297
Stores & catalog $5,174 $5,317 Eckerd drugstores $2,302 $657
(a) Pro forma results assuming the drugstore acquisitions occurred
effective January 28, 1996.
SOURCE J. C. Penney Company, Inc.
/CONTACT: Theda Page Whitehead of J. C. Penney Company, 972-431-4757/
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CO: J. C. Penney Company, Inc. ST: Texas IN: REA SU: ERN
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