The breakeven earnings per share compared to last year's $.52 per share is a positive trend, especially given the continued weak economy commented JC Penney's chairman and CEO Myron E. Ullman. The past quarter, he pointed out, is the toughest overall during the fiscal year as well.

Further adding to management's optimism was the cash and equivalents of $2.3 billion and the reduction in long-term debt to $3.4 billion, down $113 million. On the other side, operating income decreased 72.4% to $67 million, while total sales decreased 7.9% compared to last year.

Still, Ullman focused on the bright spots, including the opening of JC Penney's Manhattan store, and the re-opening of a store in Alexandria, LA, which had been shut down in 2005 due to damage from Hurricane Katrina. "The Manhattan store will capitalize on the success we're already having in the New York market," he said. "This was designed to capture both Manhattan customers and out-of-town visitors." Meanwhile, he continued, the Alexandria store is doing well.

The third quarter will see the opening of three more new stores, and Ullman said that will complete the company's new-store openings for the fiscal year. Expansion plans in 2010 will focus on opening five or fewer stores. "This is more a function of a lack of appropriate real estate developments," Ullman commented. "Commercial real estate is the most stressed in any sector. We still believe many communities are underserved by JC Penney."

However, 2010 will also offer the opportunity to reinvest in existing stores. One of those reinvestments, and large pushes, will focus on developing more Sephora in JC Penney units. "The capital expenditure for next year is likely to be $400 million versus $600 million this year," Ullman commented. "We're still spending money, but cautiously."