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J. C. PENNEY REPORTS RECORD THIRD QUARTER OPERATING RESULTS, WHICH RISE 26 PERCENT

 PLANO, Texas, Nov. 16 /PRNewswire/ -- J. C. Penney Company, Inc. (NYSE: JCP) reported today that income for the 13 weeks ended October 30, 1993, before the effect of an extraordinary item, set a record for the third quarter at $221 million, or 83 cents per share. Excluding a one-time, non-cash charge to adjust deferred taxes, income was $235 million, or 88 cents per share, an increase of 26.3 percent, as compared with $186 million, or 70 cents per share, in the same 1992 period.
 Net income in the third quarter of 1993 was $185 million, or 69 cents per share, and included an extraordinary charge of $36 million, or 14 cents per share, related to the early retirement of high cost debt.
 Commenting on the third quarter, Chairman William R. Howell said, "As previously reported, the Company registered sales gains of 8.1 percent in JCPenney stores, 15.2 percent in catalog, and 9.1 percent for total Company. This level of sales led to strong earnings performances for both stores and catalog during the period compared with last year."
 Gross margin dollars increased $139 million compared with the same 1992 period, reflecting the favorable sales performance of both stores and catalog. As a percent of retail sales, gross margin improved to 33.7 percent from 33.6 percent in the previous year's period.
 Selling, general, and administrative (SG&A) expenses, as a percent of sales, declined to 27.8 percent, from 29.1 percent in last year's period. SG&A expense levels were higher than last year's third quarter due to planned increases in catalog circulation costs and greater sales incentive compensation in stores.
 The effective income tax rate from operations was 40.4 percent in the 1993 third quarter, reflecting the retroactive impact of the Federal tax rate increase to January 1, 1993. Additionally, total income taxes include the one-time adjustment for deferred taxes. For the fourth quarter, the rate is expected to be about 38.5 percent.
 During the third quarter, the Company continued a debt restructuring program by effectively retiring approximately $500 million of high cost, long term debt, resulting in an extraordinary charge of $36 million, or 14 cents per share. For the nine months, total debt retired amounted to approximately $850 million. The retirement of this high cost debt will result in annual interest expense savings of about $35 million.
 Commenting on the outlook, Mr. Howell said, "We are constantly reviewing our pricing to keep it competitive, developing more exclusive, value-oriented merchandise, and fine tuning our promotional efforts, which are more aggressive than ever. These efforts will provide unique values for our customers in the holiday season ahead. Our customers will also have the convenience of shopping in our department stores and through catalog, a choice provided nationwide only by JCPenney."
 J. C. PENNEY COMPANY, INC.
 and Subsidiaries
 SUMMARY OF OPERATING RESULTS
 ----------------------------
 (Amounts in millions except per share data)
 13 weeks ended 39 weeks ended
 -------------- --------------
 Percent Percent
 Oct. 30, Oct. 24, Inc. Oct. 30, Oct. 24, Inc.
 1993 1992 (Dec.) 1993 1992 (Dec.)
 -------- -------- ------ ------- -------- ------
 Retail sales $4,735 $4,342 9.1 $12,662 $11,924 6.2
 Margins and expenses
 FIFO gross margin 1,596 1,457 9.5 4,196 3,981 5.4
 LIFO gross margin 1,596 1,457 9.5 4,196 3,981 5.4
 Selling, general
 and administra-
 tive expenses (1,315) (1,261) 4.2 (3,694) (3,664) 0.8
 Finance charge
 revenue 129 131 (1.4) 404 428 (5.6)
 Interest expense,
 net (57) (61) (7.7) (178) (191) (7.0)
 Profits of other
 businesses 41 37 7.3 123 99 23.4
 -------- -------- ------- --------
 Income before
 income taxes,
 extraordinary
 charge, and
 cumulative effect
 of accounting
 change 394 303 30.1 851 653 30.3
 Income taxes
 - operations (159) (117) 36.1 (332) (251) 32.4
 Deferred tax
 adjustment
 (5 cents per
 share) (14) -- (14) --
 -------- -------- ------- --------
 Total income
 taxes (173) (117) 48.3 (346) (251) 38.1
 Income before
 extraordinary
 charge and
 cumulative effect
 of accounting
 change 221 186 18.6 505 402 25.5
 Extraordinary
 charge on debt
 redemption, net
 of income taxes
 of $23 and $33 (36) -- (53) --
 Cumulative effect
 of accounting
 change for
 income taxes -- -- 51 --
 -------- -------- ------- --------
 Net income $ 185 $ 186 (0.7) $ 503 $ 402 25.1
 ======== ======== ======= ========
 Earnings per share - fully diluted
 ----------------------------------
 Income before
 extraordinary
 charge and
 cumulative effect
 of accounting
 change $ .83 $ .70 $ 1.90 $ 1.53
 ====== ====== ====== ======
 Net income $ .69 $ .70 $ 1.89 $ 1.53
 ====== ====== ====== ======
 SUPPLEMENTAL DATA
 Average shares
 --------------
 Primary 239.0 235.8 238.7 235.6
 Fully diluted 262.7 259.2 261.5 259.0
 FIFO gross margin
 percent retail
 sales 33.7 33.6 33.1 33.4
 SG&A percent
 retail sales 27.8 29.1 29.2 30.7
 Effective income
 tax rate
 - operations 40.4 38.6 39.0 38.4
 Total receivables
 serviced -- -- $3,654 $3,634
 FIFO inventory -- -- $4,699 $4,243
 -0- 11/16/93
 /CONTACT: Duncan Muir of J. C. Penney Company, Inc., 214-431-1329/
 (JCP)


CO: J. C. Penney Company, Inc. ST: Texas IN: REA SU: ERN

JG -- NY015 -- 4895 11/16/93 08:46 EST
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Date:Nov 16, 1993
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