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JCPenney Comparable store inventories below last year
21 Aug '08
4 min read
Interest expense for the quarter was $55 million, and the tax rate was 38.3 percent.
Financial Condition:
The Company continues to maintain a strong financial position. As of Aug. 2, 2008, the Company had cash and short-term investments of $2.1 billion and long-term debt of $3.7 billion, including current maturities of approximately $200 million.
Capital expenditures for the second quarter of 2008 were $227 million, in line with the Company's Bridge Plan, with the majority of spending related to the construction of new stores and the renovation of existing stores.
Total merchandise inventories increased 1.2 percent over last year to $3.7 billion, reflecting increases associated with the opening of 51 new and relocated stores since last year's second quarter. After store closures, the Company has opened 35 net new stores during the preceding four quarters. On a comparable store basis, inventories decreased 3.5 percent compared to the same period last year.
Third Quarter Earnings Guidance
Management's third quarter guidance is as follows:
• Total sales: decrease low-single digits.
• Comparable store sales: decrease mid-single digits.
• Operating income: operating income is expected to decline year over year driven by both a reduction in gross margin dollars
and an increase in SG&A expenses. As a percent of sales, operating income is expected to decline principally as a result of a higher SG&A ratio.
• Interest expense: approximately $60 million.
• Income tax rate: approximately 38 percent.
• Average diluted shares: approximately 223 million average diluted shares of common stock, including about 1 million common stock equivalents.
• Earnings per share: approximately $0.70 to $0.75 per share, which includes the impact of the Company's largest non-holiday marketing event moving from the third quarter in 2007 to the fourth quarter in 2008.
Financial Condition:
The Company continues to maintain a strong financial position. As of Aug. 2, 2008, the Company had cash and short-term investments of $2.1 billion and long-term debt of $3.7 billion, including current maturities of approximately $200 million.
Capital expenditures for the second quarter of 2008 were $227 million, in line with the Company's Bridge Plan, with the majority of spending related to the construction of new stores and the renovation of existing stores.
Total merchandise inventories increased 1.2 percent over last year to $3.7 billion, reflecting increases associated with the opening of 51 new and relocated stores since last year's second quarter. After store closures, the Company has opened 35 net new stores during the preceding four quarters. On a comparable store basis, inventories decreased 3.5 percent compared to the same period last year.
Third Quarter Earnings Guidance
Management's third quarter guidance is as follows:
• Total sales: decrease low-single digits.
• Comparable store sales: decrease mid-single digits.
• Operating income: operating income is expected to decline year over year driven by both a reduction in gross margin dollars
and an increase in SG&A expenses. As a percent of sales, operating income is expected to decline principally as a result of a higher SG&A ratio.
• Interest expense: approximately $60 million.
• Income tax rate: approximately 38 percent.
• Average diluted shares: approximately 223 million average diluted shares of common stock, including about 1 million common stock equivalents.
• Earnings per share: approximately $0.70 to $0.75 per share, which includes the impact of the Company's largest non-holiday marketing event moving from the third quarter in 2007 to the fourth quarter in 2008.
J. C. Penney Company Inc
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