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J. C. Penney outlines fiscal 2011 targets

26 Feb '11

5 min read

decreased approximately 60 basis points to 37.6 percent of sales, against the historic peak margins achieved in the fourth quarter of last year. SG&A expenses decreased $45 million or 3.0 percent versus last year. SG&A expenses were well leveraged as a percent of sales, decreasing 150 basis points to 25.7 percent of sales in the fourth quarter. Total operating expenses were 29.6 percent of sales for the quarter. Operating income for the fourth quarter increased 19.6 percent to $458 million or 8 percent of sales. The non-cash qualified pension plan expense was $55 million in the fourth quarter compared to $71 million in the same period last year.

Excluding the impact of the pension plan expense from both this year's and last year's fourth quarter, adjusted operating income as a percent of sales was 9.0 percent, compared to 8.2 percent last year. A reconciliation of non-GAAP adjusted operating income is included with this release.

Full Year Operating Performance
For the full year 2010, comparable store sales increased 2.5 percent, in-line with the Company's expectations for comparable store sales to increase low single digits for the year.Internet sales through jcp.com grew $65 million to $1.5 billion for the year, increasing 4.4 percent over last year. Total sales increased 1.2 percent for the year. Total sales were approximately 130 basis points lower than same store sales due to the Company's exit from its traditional catalog business. In 2010, catalog sales totaled $454 million.

For the year, the Company's gross margin increased $50 million over last year. As a percent of sales, gross margin decreased just 20 basis points to 39.2 percent when compared to last year's historic peak of 39.4 percent of sales. For the year, SG&A dollars decreased $32 million or 0.6 percent when compared to last year.

Adjusted operating income, excluding qualified pension plan expense, increased $92 million in 2010. As a percent of sales, adjusted operating income increased to 5.9 percent versus 5.5 percent last year. Adjusted income from continuing operations was $2.16 per share compared with $1.86 per share last year. The Company's financial position remained strong in 2010, and the cash and cash equivalents balance as of fiscal year-end 2010 was approximately $2.6 billion.

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J. C. Penney Company Inc

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