For the month, the best performing merchandise categories were in fine jewelry and women's apparel and accessories, with continued strength in juniors, dresses, and intimate apparel, while sales were softest in the home and children's divisions. Geographically, the best performing areas of the country were the southwest and northwest. Direct sales, which are heavily weighted toward home merchandise categories, also reflected weakness in the catalog business.
As part of its real estate growth strategy, the Company opened 22 new stores on Oct. 5, bringing total new store openings in 2007 to 44. With six more stores slated to open in the next few weeks, JCPenney will meet its goal of opening 50 new and relocated stores in 2007.
Sales and Earnings Outlook:
The following updated guidance takes into consideration operating performance during the first two months of the Company's fiscal third quarter, as well as the expected near-term continuation of the sales trends described above:
October sales: Comparable department store sales are expected to increase low- to mid-single digits, and reflect a major promotional event in the first week of November that will be included in this year's October reporting period. Direct sales are expected to decrease low-single digits.
Third quarter sales: Management now expects both comparable department store and Direct sales to decrease low-single digits.
Third quarter earnings: The Company now expects earnings for the third quarter to be in the range of $1.00 to $1.04 per share, compared to the previous guidance of $1.28 per share that had been included in full year earnings guidance.
Fourth quarter: As is its normal practice, management will address fourth quarter earnings guidance when it reports third quarter earnings on Thursday, Nov.15.
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