Penney Profits Rise to $123 MillionShares of J.C. Penney Co. Inc., Plano, TX, rose strongly yesterday after the retailer said third-quarter profit increased on better sales at both department and drug stores.
The company said it earned $123 million compared to $31 million in the third quarter last year. Excluding a gain from the sale of its Direct Marketing Services business, Penney said it would have earned $89 million.
Revenue rose to $7.87 billion from $7.73 billion a year earlier. However, the total in the Department Stores and Catalog sector fell to $4.31 billion from $4.36 billion.
Total retail sales for the 39 weeks ended Oct. 26 reached $22.8 billion, up from $22.46 billion for the comparable period ended Oct. 27, 2001. But the total in the Department Stores and Catalog category dropped to $11.94 billion from $12.28 billion.
Net income for the 39 weeks ended Oct. 26 reached $203 million, up from $3 million.
Though Catalog sales plummeted 21.2 percent, mainly from lower circulation and page counts, Internet sales continued to perform well and Catalog continued to improve its profit contribution, the company said. Department Stores and Catalog gross margin rose 130 basis points as a percentage of sales. Improved gross margin results mainly from centralization and Catalog inventory management.
Also, The Sportsman's Guide Inc., South St. Paul, MN, posted its third-quarter results, which included sales of $36.9 million compared with $36.5 million in the same period last year. Net earnings in the quarter totaled $269,000, compared with a net loss of $124,000 in the three months ended Sept. 30, 2001.
Sales reached $113.5 million in the nine months ended Sept. 30, up from $107.2 million in the first three quarters of 2001.
Internet-related sales as a percentage of total sales reached 30 percent for the second consecutive quarter, compared with about 21 percent for the same period in 2001. For the nine months, Internet-related sales reached 29 percent, up from 21 percent.