JCPenney's sales increase in 2010 as retailer shifts focus toward e-commerce

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Retailer JCPenney's 2010 fiscal year net sales increased 1.2% compared with fiscal 2009, the company said February 25. The company's Internet sales increased 4.4% to $1.5 billion in fiscal 2010, compared with the prior fiscal year.

JCPenney generated $495 million in fourth-quarter Web sales, a year-over-year increase of 6.7%. Total net sales in Q4 2010 increased 2.8% to $5.7 billion, compared with Q4 2009. For full-year 2010, comparable store sales increased 2.5% year-over-year.

“We're focused on [delivering digital] interactions, not just transactions,” said Kristin Hays, VP of investor relations at JCPenney, on an earnings call. “We're focused on offering personalized impactful digital experiences and dramatically improving the shopping experience on JCP.com. That's why we introduced guided navigation, launched a new mobile site, connected with our customers through social media, brought in digital coupons and [introduced] other new features.”  

Hays added that the JCP rewards program has grown to 26 million members.

Catalog sales totaled $454 million in 2010. JCPenney recently cancelled its catalog distribution, and the retailer said it expects sales to grow at a slower rate as a result.

Full-year net income increased 55% to $389 million, compared with the prior year. Net income for fiscal Q4 2010, which ended January 31, increased 36% to $271 million.

Full-year operating income increased 26% to $832 million, compared with the prior year. Operating income in the fourth quarter increased 19.6% year-over-year to $458 million.

“2010 was a very good year for JCPenney,” said Myron Ullman, chairman and CEO of the company, on the earnings call. Ullman referenced the company's new logo, saying it represents JCPenney's “rich legacy and reflects the modern retailer we've become.”

JCPenney will launch a spring fashion campaign on February 27, during the Academy Awards broadcast, to underscore its recent initiatives to provide products at affordable price points and to introduce the new logo.

The strongest merchandise results were in men's apparel, women's accessories and Sephora inside JCPenney, the company said.

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