J. C. Penney Company, Inc. reported comparable store sales decreased 8.2% for the five weeks ended July 4, 2009, slightly better than the company’s guidance for sales to decrease 9% to 12% and compared to a 2.4 percent decrease last year. Total sales in June decreased 6.7%.

 

From a merchandise perspective, men’s Father’s Day merchandise categories were among the best performers during the June period. The fine jewelry division was also a better performer than in previous months after a successful Diamond Showcase promotional event. The children’s division experienced the weakest sales results for the month reflecting lower levels of clearance sales. Geographically, the best performing area of the country was the southwest region, while the southeast region had the weakest results.

 


































































































































































Preliminary June Sales Summary


($ in millions)

       
Total Company Sales % Increase/(Decrease)
for period ended Total Sales Comp Stores
Jul. 4, Jul. 5,    
2009 2008 2009 2008 2009 2008
 

5 Weeks

$ 1,495 $ 1,602 (6.7 ) (0.4 ) (8.2 ) (2.4 )
 

9 Weeks

$ 2,749 $ 2,946 (6.7 ) (1.3 ) (8.2 ) (3.3 )
 

22 Weeks

$ 6,633 $ 7,073 (6.2 ) (3.6 ) (7.8 ) (5.7 )

 

 

July Sales and Updated Second Quarter Sales and Earnings Outlook

 

Based primarily on better-than-expected performance during the May and June periods, management is raising its guidance for second quarter earnings. In addition, management is confirming second quarter comparable store sales expectations at the favorable end of its original guidance range. The following updated guidance takes into consideration operating performance during the first two months of the company’s fiscal second quarter and the company’s sales guidance for the month of July.

 

July sales: Comparable store sales are expected to decrease 13% to 16%. In last year’s July period, comparable store sales decreased 6.5%. Sales during the July period are expected to be negatively impacted by a later start to the Back-to-School selling period and the shift of several state tax-free shopping periods into this year’s fiscal August, as well as by lower levels of clearance inventory relative to last year.

 

Second quarter sales: Management now expects comparable store sales to decrease 9.5% to 10.5% compared to original guidance for a decrease of 9% to 12%.

 

Second quarter earnings: Management now expects to report a loss in the range of 8 cents to 12 cents per share, which includes the impact of our previously announced voluntary contribution of common stock to the company’s qualified pension plan. This compares to previous guidance for a loss in the range of 15 cents to 25 cents per share provided prior to the pension contribution.