Apr 9, 2009
JC Penney, TJX, Ross issue brighter forecasts
Apr 9, 2009
NEW YORK, April 9 (Reuters) - J.C. Penney Co Inc (JCP.N) on Thursday 9 April forecast a smaller first-quarter loss, after the department store chain's March same-store sales fell less than expected, helped by demand for spring merchandise.
Penney, which sells brands such as nicole by Nicole Miller and Fabulosity by Kimora Lee Simmons, has been touting unique brands to woo shoppers who have been spending less money in department stores during the recession.
Its shares rose 7.9 percent amid wide gains in the retail sector, with the S&P Department Stores Sub-Industry Index .GSPRETD up 4.9 percent and the S&P Retail Index .RLX rose 3.3 percent.
Penney's March same-store sales, or sales at stores open at least one year, fell 7.2 percent while analysts had expected a 10.5 percent decline, according to Thomson Reuters data.
Same-store sales trumped the company's own expectations for a low-double-digit to mid-teens percentage decline.
Some of the strength came from the women's department and home goods areas, Chief Executive Myron "Mike" Ullman said in a statement.
Penney was not alone with its brighter-than-expected sales. About half of U.S. retailers that posted March same-store sales results on Thursday beat expectations, according to Thomson Reuters data.
Penney now expects to lose 5 cents to 10 cents per share in the first quarter, including the impact of a pension expense. It had previously forecast a loss of 20 cents to 30 cents per share on that basis.
Analysts, on average, expect Penney to lose 22 cents a share, according to Reuters Estimates.
For April, the retailer expects same-store sales to fall 9 percent to 12 percent, reflecting one less selling day in the period since stores will be closed on Easter, Penney said.
Also, Penney's $750 million, three-year revolving credit line was oversubscribed ahead of closing, according to sources.
TJX said it now expects its first-quarter earnings to match or exceed the high end of its forecast, which called for a profit of 32 cents to 38 cents per share.
Its rival Ross Stores raised its forecast for the first quarter, citing better gross margin and expense control. Ross now expects a first-quarter profit of 68 cents to 70 cents per share, up from a prior view of 56 cents to 61 cents a share.
Both off-price retailers, which buy excess apparel, accessories and home goods in bulk and sell them in their stores at deep discounts, posted better-than-expected March same-store sales.
Penney shares were up $1.78 to $24.38, while Ross shares were up 5.8 percent to $40.07 and TJX shares gained 2.7 percent to $27.43. (Reporting by Aarthi Sivaraman; Editing by Andre Grenon)
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