Penney, OfficeMax, Tiffany, Sportsman's Guide Give Results

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J.C. Penney Company Inc., Plano, TX, yesterday reported a second-quarter operating loss of 5 cents per share compared with a loss of 20 cents per share in last year's period, before the effects of non-comparable items.

Including the effects of non-comparable items, last year's quarterly loss was 23 cents per share.

Second-quarter LIFO operating profit totaled $22 million, up from $11 million last year.

Comparable-store sales fell 2.4 percent, with Home and Fine Jewelry producing sales gains. The decline resulted primarily from lower-than-planned levels of inventory in the quarter.

Though Catalog sales fell 21.4 percent, changes in policies and programs led to an improvement in its profit contribution. Department Stores and Catalog gross margin rose 290 basis points as a percentage of sales. Gross margin benefited from centralized merchandising and Catalog inventory management. Expenses in the quarter benefited from reductions in store labor costs and lower Catalog expenses.

In the 13 weeks ended July 27, retail sales in Department Stores and Catalog were $3.623 billion, down from $3.855 billion in the comparable period ended July 28, 2001. In the 26 weeks ended July 27, retail sales in Department Stores and Catalog totaled $7.629 billion, down from $7.917 billion in the comparable period ended July 28, 2001.

In other news:

* OfficeMax Inc., Cleveland, reported a comparable-store sales increase of 3.4 percent for its second fiscal quarter ended July 27 while consolidated sales rose 4.8 percent to $1.01 billion, excluding last year's sales from 29 stores that closed on the first day of this fiscal year. Including sales from the closed stores for the second fiscal quarter last year, revenue increased 3.1 percent from $978.8 million in the same quarter last year. The company said the improvement was fueled by a 4 percent same-store, year-over-year increase in customer transactions.

On a GAAP basis, which excludes a net tax effect, OfficeMax posted a fiscal second-quarter net loss of $33.4 million. The company said its results currently do not reflect a tax provision or benefit because of the required accounting treatment for its deferred tax assets. Assuming a statutory tax rate consistent with the prior year of about 40 percent, OfficeMax said it would have reduced its loss to $20.2 million. This represents a 16 percent improvement from last year's second fiscal quarter net loss of $24 million.

* Tiffany & Co., New York, reported that its net sales increased 1 percent in its fiscal second quarter ended July 31. Net sales totaled $374,427,000, up from $371,301,000 the prior year. On a constant exchange rate basis that excludes translation effects between foreign currencies and the U.S. dollar, comparable-store sales fell 5 percent. Net earnings fell 9 percent to $32,714,000 from $36,052,000 in the prior year.

For the six months ended July 31, net sales of $721,556,000 were 2 percent greater than $707,702,000 in the prior year. On a constant exchange rate basis, net sales increased 3 percent and comparable-store sales fell 2 percent. Net earnings fell 2 percent to $65,423,000 from $66,814,000.

Direct Marketing sales increased 12 percent to $38,747,000 in the second fiscal quarter and rose 11 percent to $72,568,000 in the first half of the year. In those respective periods, combined catalog/Internet sales increased 27 percent and 32 percent, while Business sales fell 5 percent and 8 percent.

*This week, The Sportsman's Guide Inc., South St. Paul, MN, reported that for the second quarter it posted sales of $34.9 million compared with $31.8 million in the same period last year, while net earnings totaled $317,000 compared with a net loss of $207,000 in the second quarter last year. For the first half of this year, it reported sales of $76.6 million, up from $70.7 million in the first half of 2001.

"Higher levels of catalog and Internet-related sales and lower SG&A expenses were the fundamental reasons for our stronger-than-anticipated results," Gregory R. Binkley, president and CEO, said in a statement.

Internet-related sales as a percentage of total sales reached 30 percent in the quarter compared with about 21 percent for the same period in 2001.


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