J. C. Penney Company, Inc. comparable department store sales increased 8.1% for the month of October, on top of a 2.4% increase last year. Total department store sales increased 11.0% for the month, including the positive impact from 28 new and relocated stores opened in 2006 – 20 of which opened on Oct. 6. The October store openings represent the first significant acceleration of the company's store growth program that will add more than 175 new stores over the 2006 to 2009 time frame.
Sales in the October period were led by strong consumer demand for fall apparel and accessories, with the best overall merchandise performance in men's, children's and women's apparel categories. Geographically, all regions of the country generated consistent, strong comparable store sales gains. Management is pleased with sales results for its new product launches, including a.n.a, East 5th and JCPenney's new, exclusive beauty offering, Sephora, which launched in the first five stores on Oct. 6.
Internet sales continue to represent the company's fastest growing sales channel, increasing approximately 26 percent in October, on top of a 20% increase last year. Total Direct sales increased 2.1% for the period, which was in line with guidance, and compared with a 2.9% decrease last year. The best performing categories in Direct were women's apparel and hard home merchandise.
November Sales Outlook
Management's outlook is for both comparable department store and Direct sales to increase low single digits for the four week November period ending Nov. 25, 2006. In last year's November period, comparable department store and Direct sales increased 3.6% and 2.5%, respectively.
Updated Third Quarter Earnings Guidance
While results for the third quarter have not been finalized, based on sales and operating performance trends, management is raising guidance for third quarter earnings from continuing operations to the area of $1.22 per share, an increase of 11 cents per share from previous guidance of $1.11 per share, compared with 94 cents per share in last year's third quarter.
Preliminary October Sales Summary ($ in millions) % Increase /(Decrease) ----------------------- Period ended All Stores Comp Stores ----------------- ----------- ----------- Oct. 28, Oct. 29, 2006 2005 2006 2005 2006 2005 -------- -------- ----- ----- ----- ----- 4 Weeks ---------------------------- Department stores $1,298 $1,169 11.0 2.7 8.1 2.4 Direct 240 235 2.1 (2.9) -------- -------- Total Company $1,538 $1,404 9.5 1.7 13 Weeks ---------------------------- Department stores $4,062 $3,796 7.0 3.0 5.2 2.5 Direct 719 683 5.3 (0.9) -------- -------- Total Company $4,781 $4,479 6.7 2.4 39 Weeks ---------------------------- Department stores $11,228 $10,645 5.5 3.8 4.4 3.0 Direct 2,011 1,933 4.0 3.5 -------- -------- Total Company $13,239 $12,578 5.3 3.7