Penney Opens More Stores

The majority of Penney's new stores in 2005 were in its off-mall format. It expects that most of the new stores it opens in 2006 will be in the off-mall format, with about 27 new store openings plan. Most of the store openings are expected to occur in the second half of the year. In addition, the company launched the rollout of a new point-of-sale system that reduces transaction time, with more than 430 stores converted to the new technology in 2005 and the remaining stores scheduled for conversion this year. Penney operates 1,019 department stores throughout the US and Puerto Rico.

Net income climbed more than 65% to $551 million for the quarter and increased doubled to $1.08 billion for the full year. Earnings per share from continuing operations for the fourth quarter and full year were $1.92 per share and $3.83 per share, respectively, and included 21 cents per share and 20 cents per share, respectively, from the effects of a previously disclosed one-time tax benefit. Comparative store sales rose 2.6% for the quarter and 2.9% for the year. Total sales rose to $6.2 billion for the fourth quarter ended Jan. 28, compared with $5.95 billion for the comparable period a year earlier. Sales for the full year totaled $18.78 billion versus $18.09 billion.

The 2005 financial results demonstrate "the progress we are making in executing J.C. Penney's long range plan," company chairman and CEO Myron Ullman III said. The elements of the long range plan include "making an emotional connection with the customer, making JCPenney an easy and exciting place to shop, making JCPenney a great place to work and becoming a leader in performance and execution."

The 2005 results "exceeded virtually every one of our internal metrics" in what was "the first year of our five-year long range plan, which is all about growth," Ullman said. The overall goal of the plan is for Penney to become "the preferred choice of Middle America," the company said when it announced the long-range program.

Among the upcoming steps Penney is planning as part of its long range plan is the launch next month of the largest branding campaign in the company's history. The campaign will include the opening of the JCPenney Experience virtual store in New York City's Times Square and a sponsorship of the Academy Awards.