J.C. Penney Co. said Thursday its fourth-quarter profit fell 10 percent as its middle-class customers struggled with a weakening economy. The department store retailer predicted modest earnings this year.
National earnings
February 22, 2008 at 2:32AM
Chairman and Chief Executive Myron E. Ullman III said there were no signs that consumer spending would rebound quickly, so the company was planning "for a difficult economic climate." For example, the company now expects to open 36 stores this year, down from the original plan of 50.
Penney said net income slipped to $430 million, or $1.93 per share, in the quarter ended Feb. 2. The company beat its own lowered expectations, and analysts had set their target at $1.77 per share. A year ago, the Plano, Texas-based company earned $477 million, or $2.09 per share, when the fourth quarter included an extra week.
Sales fell 4 percent to $6.39 billion, matching the forecast of analysts surveyed by Thomson First Call. Same-store sales at locations open at least a year, a key indicator in retailing, fell 2.3 percent.
Analysts said the company beat its fourth-quarter profit predictions by tightly controlling costs to cope with slowing sales. Shares rose 8 cents to $48.03 Thursday.
Safeway Inc. Safeway Inc., the third-largest U.S. grocery chain, said fourth-quarter profit fell 2.2 percent after a year-earlier tax gain. The company said sales in the current quarter slowed, pushing the stock down the most in four years.
Net income decreased to $301.1 million, or 68 cents a share, while revenue rose 6.8 percent to $13.4 billion, helped by store renovations, Safeway said. Profit matched the average analyst estimate. A year earlier, a tax gain boosted earnings by 8 cents. The chain affirmed its full-year forecast.
Sales at stores open at least year, excluding fuel, advanced 2.7 percent in the quarter, below some analysts' predictions. Higher food and gasoline prices, the worst housing slump in a quarter century and a sluggish economy have hurt revenue at supermarkets.
Same-store sales growth slowed from 3.5 percent in the year-earlier period and 3 percent in the third quarter. Some investors consider same-store sales important because they show how fast revenue can rise without new locations.
Safeway, based in Pleasanton, Calif., fell $2.28, or 7.1 percent, to $29.66 at 4:33 p.m. in New York Stock Exchange composite trading, the biggest drop since April 2003. It regained 4 cents, to $29.70, in after-hours trading.
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Health care spending rose by 15%, driven by higher prices. Officials say solutions are needed to prevent Minnesotans from being priced out or delaying care they need.
