June 24, 2024

Profit Rises At Penney’s, But Slides At Lowe’s

Lowe’s, the home improvement chain, said its profit fell 6 percent, held down by economic conditions, while the department store chain J. C. Penney said its profit rose 6 percent, helped by cost cuts and a strong reception to its exclusive merchandise.

Lowe’s said its results were also hurt by bad weather, and it cut its full-year forecast. The company’s results also fell short of Wall Street forecasts.

Lowe’s reported net income of $461 million, or 34 cents a share, down from $489 million, or 34 cents a share, a year earlier. Revenue in the period, which ended April 29 and was the first quarter of Lowe’s fiscal year, dipped 2 percent to $12.19 billion, with revenue at stores open at least a year down 3.3 percent. Analysts surveyed by FactSet had expected earnings of 36 cents a share on revenue of $12.54 billion.

Lowe’s cautioned in February that consumers were still holding back and its earnings were at the low end of its forecast of 34 to 38 cents a share for the quarter.

The chief executive, Robert A. Niblock, said in a statement that the company was also dealing with difficult comparison to a year ago, when federal rebates raised demand for appliances.

For the full year, Lowe’s expects earnings of $1.56 to $1.64 a share and an approximately 4 percent revenue increase. The chain previously forecast earnings of $1.60 to $1.72 a share on a 5 percent revenue rise.

Analysts predict full-year earnings of $1.70 a share on revenue of $50.9 billion.

Stock in Lowe’s, which is based in Mooresville, N.C., fell 2.8 percent in early trading Monday.

J. C. Penney said it earned $64 million, or 28 cents a share, up from $60 million, or 25 cents a share, a year earlier. Revenue in the period, which ended April 30 and was the first quarter of Penney’s fiscal year, edged up to $3.94 billion from $3.93 billion. Penney’s revenue at stores open at least a year rose 3.8 percent.

Analysts predicted earnings of 26 cents on revenue of $3.94 billion, according to FactSet.

“We are successfully implementing our merchandising initiatives, with strong gains in both our men’s and women’s apparel businesses,” the chief executive, Myron E. Ullman III, said in a statement. “Additionally, the steps we have taken to manage our expenses position us to increase the flow-through of sales to the bottom line.”

Under pressure from shareholders, Penney has cut costs, including closing some stores, outlets and call centers. It is also finishing up closing its catalog business after announcing in November 2009 that it would stop publishing its twice-a-year “big book.”

Mr. Ullman promised more cost-saving initiatives, including trimming marketing expenses and streamlining sourcing operations. The company expects to save about $25 million to $30 million by 2013, with about half of that in 2012.

He expects the company to achieve an earnings target of $5 a share for 2014.

Shares in Penney, which is based in Plano, Tex., fell 3.2 percent, to $37.21.

Article source: http://feeds.nytimes.com/click.phdo?i=ae64881b74396ff9c23f234acea56ea4

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