Cost Control Firms Bottom Line for J.C. Penney in Fourth Quarter
PLANO, Texas-Reduced expenses helped J.C. Penney to an impressive 36 percent gain in net income, to $271 million, in its fourth quarter.
Selling, general and administrative expenses were slimmed by 3 percent in dollar terms, and 151 basis points as a percentage of net sales, to 25.7 percent. Myron Ullman III, J.C. Penney's chairman and chief executive officer, said efficiencies throughout the company was one of the main factors in the retailer's healthier fiscal year as a whole. For the year, net income skyrocketed by 55 percent to $389 million.
Net sales for the fourth quarter increased 2.8 percent to $5.7 billion--a performance that included a same-store sales rise of 4.5 percent and a gain of 6.7 percent in sales on the retailer's website, jcp.com. For the fiscal year, J.C. Penney's net sales edged up 1.2 percent to $17.8 billion, including a comparable-store sales increase of 2.5 percent and a 4.4 percent rise in jcp.com sales. The top line for both the quarter and the year felt the effect of J.C. Penney's exit from its catalog business, according to a company statement.
Gross margin finished the fourth quarter at 37.6 percent, down 62 basis points from the fourth-quarter gross margin last year.