J.C. Penney Co. (NYSE: JCP) reported Monday that its fiscal first-quarter profit climbed to $64 million, or 28 cents a share, from $60 million, or 25 cents, in the prior-year quarter. Revenue increased 0.4% to $3.94 billion from $3.93 billion. Analysts, on average, expected the company to report earnings of 25 cents per share on revenue of $3.95 billion.
"Our ability to deliver on our objectives in the first quarter reflects the progress we are making in executing the Long Range Plan for growth we announced in April 2010," said Myron E. (Mike) Ullman, III, chairman and chief executive officer. "We are successfully implementing our merchandising initiatives, with strong gains in both our men's and women's apparel businesses. Additionally, the steps we have taken to manage our expenses position us to increase the flow-through of sales to the bottom line. We are accelerating this process through a series of initiatives across the Company to maximize operational effectiveness. We expect these ongoing actions will result in substantial expense savings, beginning this year, and allow us to significantly accelerate profitability."
Specifically, following on the work it has done to wind down operations that no longer deliver meaningful returns as well as significantly improve in-store execution, the Company now plans to streamline operations, carry out further process improvements across its stores, Supply Chain, and Home Office, and optimize marketing expenses, while continuing to implement its sales growth initiatives. The positive impact of the savings generated by these actions began in the first quarter of fiscal 2011 and will grow significantly over the next two years. These expense initiatives will allow the Company to achieve its 2014 earnings target of $5.00 per share with a return to historic operating profit margin levels, even with fewer new store openings expected in the latter years of its Long Range Plan in light of challenging commercial real estate markets and other economic factors.
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