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Penney affirms outlook
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August 22, 2001: 9:25 a.m. ET
No. 5 U.S. retailer repeats 3Q and full-year earnings estimates
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NEW YORK (CNNfn) - J.C. Penney Inc. affirmed its fiscal third-quarter and full-year guidance Wednesday, projecting earnings in a range slightly below the consensus of Wall Street analysts.
The nation's No. 5 retailer, based in Plano, Texas, said it sees earnings for the third quarter ending in October of 10 cents to 15 cents a share, with earnings for the fiscal year ending in January of 30 cents to 35 cents a share.
Analysts polled by earnings tracker First Call are anticipating third-quarter profit of 14 cents a share and full-year earnings of 34 cents a share.
Penney CEO Allen Questrom plans to discuss the company's outlook Friday at an institutional investor breakfast in Minneapolis sponsored by Fahnestock & Co.
Penney's (JCP: Research, Estimates) shares ended down 52 cents at $26.38 Tuesday.
The company, which also owns the Eckerd drugstore chain, is in the midst of a turnaround led by Questrom, who took the helm about a year ago after guiding men's clothier Barney's New York and Federated Department Stores, owner of Macy's and Bloomingdale's, through successful turnarounds.
Penney has struggled with declining profits in recent years through a combination of a stale corporate atmosphere, poorly designed stores and the expansion of competitors such as Kohl's Corp. Wal-Mart Stores Inc. and Target Corp., which have steadily been chipping away at its market share.
Under Questrom's leadership, the company has trimmed costs, streamlined inventory and cleaned up its stores, helping to drive improved same-store sales while many other retailers were reporting flat or negative figures. Same-store sales refer to sales at stores that have been open at least a year, a key gauge for retailers.
Even if Penney misses third-quarter and full-year forecasts but stays within the range of its expectations, that's a vast improvement over the year-earlier period, when the company reported losses of 24 cents and 44 cents for the third quarter and full year.
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Eckerd, which also had been struggling, now is logging higher sales and is competitive with the top names in its category, Walgreen's, CVS and Rite Aid.
"I think they're only in the first or second inning of a turnaround," Bear Stearns retail analyst Steve Kernkraut said in an interview with CNNfn.com earlier this month. "They've done a miraculous job, but I think there's much more to come." 
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J.C. Penney
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