The company’s sales however reported a fall of 3.6 percent. However, the department store said it will improve its sales for this year and expects same-store sales to be “flat in the first quarter and up in the low-single digits for the full fiscal year.”
“Last year there was a lot of concern around the fact that they were focusing on gross margins rather than growing sales and market share, which was the opposite strategy of Kohl's. So the fact that they say they can get positive comp sales this year is significant,” said Erika Maschmeyer, a senior research analyst with Robert W. Baird & Co.
“J.C. Penney has been a laggard as a stock and on the comp performance side, so a little bit of this is sort of catch-up.”
Penney’s plans for 2010
Penney’s gross margins rose by 3.6 percentage points during the fourth quarter while its net profit fell by 5.2 percent.
Chief Executive Myron Ullman said he expects the economy to remain complicated this year.
He said the best performers for Penney were women's apparel and shoes, while the weakest were home goods division.
Ullman also said that the company plans to open 75 new locations of beauty products retailer Sephora soon. He also expects to have 600 Mango locations by the end of 2011. Penney signed a deal with Mango in Dec. 2009.
Ullman’s view on cutting back sales
Ullman also responded on cutting back sales inventories, and focusing on reducing costs. He said, “We chose not to chase sales at any cost. I think you can see there's some return to more normal behavior and that the upscale stores are seeing a better trend.”
“I would expect as the customer feels better about the employment picture, as the political climate starts to become less volatile, and the dialogue is more positive about people's future family income, I think that will be reflected in mall traffic,” he added.
More on Penney
Penney has stores in California, Illinois, Texas, New York and Pennsylvania. The company operates catalog sales merchant offices nationwide and also has leased departments such as Sephora, Optical, and Starbucks Coffee etc.
Penney currently operates about 1,100 stores in the nation and Puerto Rico and plans to open two more in early 2010. The company is based in Plano, Tex.
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