Penney's earnings worked out to 46 cents per share for the second quarter ended July 30, compared with 22 cents in the comparable quarter last year. The company's income was even higher when discontinued operations were figured in--$131 million and 50 cents a share, compared with a loss of 2 cents per share in the second quarter last year.
Ken Hicks, president and chief merchandising officer, said in the conference call that 12 of the 19 new stores this year will be in Penney's new off-mall format. "Our new stores, as a group, continue to generate sales that are higher than the company average, and the off-mall stores are a good complement to our mall presence," Hicks said. He added that the company is on schedule with a new point-of-sale system rollout and plans to have half of its stores switched over to the new system by year-end.
Penney's higher earnings came on sales that grew 5.4% to $3.9 billion. Comparable department store sales increased 4.2% on top of a 6.9% increase in last year's second quarter. In an earnings announcement, the company's chairman and CEO, Myron Ullman III, attributed the strong second quarter performance in part to "the continued progress we are making in offering merchandise assortments that fit our customers' lifestyles."
Specifically, Ullman mentioned "building our private brands" as one of the keys to the chain's strategy, as well as offering national brands, that the "middle American consumer" wants. Penney is also shoring up its financials via a stock repurchase program that now totals more than $4 billion since August 2004.
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