The department-store retailer saw its bottom line decline due to a 3.6 percent drop in net sales, which totaled $5.6 billion in the quarter and which included a 4.5 percent fall in same-store sales; and an 8.2 percent surge in its total operating expenses. These two factors offset a 360-basis-point gain in gross margin for the fourth quarter, which finished at 38.2 percent.
J.C. Penney said in a statement that the quarter and the full fiscal year exceeded its expectations. Myron Ullman III, chairman and chief executive officer, said, “By stepping up the style of the merchandise we offer customers and enhancing service in our stores, we were able to drive cash generation and profitability in spite of the difficult times.”
Even so, J.C. Penney’s net income for the year fell 56 percent to $251 million, while net sales slipped 5 percent to $17.6 billion. Comparable-store sales dropped 6.3 percent.
For 2010, the company said it expects low single-digit increases in both total net sales and same-store sales.