-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MMHbtw3YDYQAgk94cKIrdmR3ch8w3EaPq4Xxr3ePSUeyMLxDA91Y7rouFDyaums8 28fC2Rd8RqoSsd2pjpVEog== 0001166126-03-000023.txt : 20031113 0001166126-03-000023.hdr.sgml : 20031113 20031113151908 ACCESSION NUMBER: 0001166126-03-000023 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031111 ITEM INFORMATION: FILED AS OF DATE: 20031113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: J C PENNEY CO INC CENTRAL INDEX KEY: 0001166126 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 260037077 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15274 FILM NUMBER: 03997777 BUSINESS ADDRESS: STREET 1: 6501 LEGACY DRIVE CITY: PLANO STATE: TX ZIP: 75024-3698 BUSINESS PHONE: 9722431100 FORMER COMPANY: FORMER CONFORMED NAME: J C PENNEY HOLDINGS INC DATE OF NAME CHANGE: 20020128 8-K 1 jcpco8k1113.txt FORM 8K - NOVEMBER 12, 2003 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________ FORM 8-k CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 11, 2003 J. C. PENNEY COMPANY, INC. (Exact name of registrant as specified in its charter) Delaware 1-15274 26-0037077 (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation ) Identification No.) 6501 Legacy Drive Plano, Texas 75024-3698 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (972) 431-1000 Item 12. Results of Operations and Financial Condition. J. C. Penney Company, Inc. issued a news release on November 11, 2003, announcing its 2003 third quarter consolidated earnings. This information is attached as exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. J. C. PENNEY COMPANY, INC. By: /s/ Robert B. Cavanaugh -------------------------------- Robert B. Cavanaugh Executive Vice President, Chief Financial Officer Date: November 12, 2003 EXHIBIT INDEX Exhibit Number Description 99.2 J. C. Penney Company, Inc. News Release issued November 12, 2003 EX-99 4 pressrelease1112.txt RESULTS OF OPERATIONS JCPenney News Release CONTACT Tim Lyons Quinton Crenshaw Eli Akresh Bob Johnson Public Relations Public Relations Investor Relations Investor Relations (972) 431-4834 (972) 431-5581 (972) 431-2207 (972) 431-2217 tmlyons@jcpenney.com qcrensha@jcpenney.com eakresh@jcpenney.com rvjohnso@jcpenney.com
JCPENNEY REPORTS THIRD QUARTER EARNINGS Department Stores and Catalog Operating Profit Increased 22% Catalog/Internet Performance Continues to Improve PLANO, TX, November 11, 2003 -- J. C. Penney Company, Inc. (NYSE: JCP) today reported third quarter income from continuing operations of $0.27 per share compared with $0.30 per share in last year's quarter. Earnings were in line with management's recent guidance. Allen Questrom, Chairman and Chief Executive Officer said, "Operating results for Department Stores and Catalog/Internet exceeded our expectations, reflecting better execution, continuing benefits from our centralized business model, and delivery of compelling value in all three channels; Department Stores, Catalog and Internet. Eckerd's results, however, were below expectations due to weak sales trends. As we have stated previously, the Company is in the process of evaluating strategic alternatives for Eckerd, and a decision is expected by the end of the year." Questrom added, "We anticipate favorable trends in the consumer environment during the holiday season, and as a result, we expect improving performance in Department Stores and Catalog/Internet compared with last year. At Eckerd, we anticipate continued weakness in both sales and operating profit trends. On a consolidated basis, we currently expect fourth quarter earnings to be in the area of $0.80 per share, and the full year to be about $1.25 per share." Department Stores and Catalog - ----------------------------- Third quarter LIFO operating profit increased 22 percent, or 90 basis points as a percent of sales, to $207 million compared with $170 million in last year's period. Comparable department store sales increased 1.7 percent. Sales were driven by strong trends in Home, Back-to-School apparel, Family Shoes and Fine Jewelry. Catalog/Internet sales increased 4.1 percent. Print media sales continue to strengthen, with good results from the Fall/Winter Big Book and a positive customer response to the Christmas catalog. In addition, Internet sales continued a strong growth trend, increasing by over 45 percent during the quarter and year-to-date. Department Stores and Catalog gross margin increased by 190 basis points as a percent of sales, and reflects better execution in a centralized environment. SG&A expenses increased as anticipated, with about half the increase attributable to non-cash pension expense. The remaining increase reflects the completion of the store distribution center network, partially offset by expense savings in store labor from centralized checkouts and the elimination of in-store receiving. Eckerd Drugstores - ----------------- LIFO operating profit was $34 million in this year's third quarter compared with $79 million last year. Operating profit margin decreased by 130 basis points as a percent of sales, principally as a result of weak sales. Total drugstore sales increased 2.2 percent, while comparable store sales decreased 1.0 percent during the quarter, with pharmacy sales increasing 1.4 percent and non-pharmacy, or front-end, sales decreasing 6.5 percent. Gross margin for the quarter decreased by 30 basis points as a percent of sales. Gross margin for the quarter includes a LIFO charge of $7 million compared with a charge of $9 million last year. SG&A expenses were not leveraged as a percent of sales. Financial Condition - ------------------- The Company's financial condition continues to be strong. As part of its longer-term strategy of maintaining a well-funded pension plan, the Company contributed $300 million, or $190 million after-tax, to the plan during the third quarter. At the end of the quarter, the Company's cash investments were consistent with its plan at $1.9 billion, reflecting normal holiday inventory build-up. Full year free cash flow is expected to be in line with previous guidance. Senior management will host a live conference call and real-time webcast on Tuesday, November 11, 2003, beginning at 9:30 a.m. EST. Access to the conference call is open to the press and general public in a listen only mode. To access the conference call, please dial 973-935-8514 and reference the JCPenney Quarterly Earnings Conference Call. The telephone playback will be available for two days beginning approximately two hours after the conclusion of the call by dialing 973-341-3080 and entering the ID code 4279379. The live webcast may be accessed via JCPenney's Investor Relations website (at JCPenney.net), or on StreetEvents.com (for members) and FullDisclosure.com (for media and individual investors). Replays of the webcast will be available for up to 90 days after the event. J. C. Penney Corporation, Inc., the wholly-owned operating subsidiary of the Company, is one of America's largest department store, drugstore, catalog, and e-commerce retailers, employing approximately 230,000 associates. As of October 25, 2003, it operated 1,038 JCPenney department stores throughout the United States, Puerto Rico, and Mexico, and 56 Renner department stores in Brazil. Eckerd Corporation operated 2,735 drugstores throughout the Southeast, Sunbelt, and Northeast regions of the U.S. JCPenney Catalog, including e-commerce, is the nation's largest catalog merchant of general merchandise. J. C. Penney Corporation, Inc. is a contributor to JCPenney Afterschool Fund, a charitable organization committed to providing children with high quality after school programs to help them reach their full potential. This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which reflect the Company's current views of future events and financial performance, involve known and unknown risks and uncertainties that may cause the Company's actual results to be materially different from planned or expected results. Those risks and uncertainties include, but are not limited to, competition, consumer demand, seasonality, economic conditions, and government activity. Investors should take such risks into account when making investment decisions. # # # J. C. PENNEY COMPANY, INC. SUMMARY OF OPERATING RESULTS (Amounts in millions except per share data) 13 weeks ended 39 weeks ended -------------- -------------- Oct. 25, Oct. 26, Inc. Oct. 25, Oct. 26, Inc. 2003 2002 (Dec.) 2003 2002 (Dec.) ------- ------- ------- ------- ------- ------- Comparable store sales increase/(decrease) Department stores 1.7% 3.9% -0.4% 3.0% Eckerd drugstores -1.0% 4.9% -0.9% 6.2% Total retail sales Department stores and catalog $ 4,343 $4,310 0.8% $ 11,724 $11,939 -1.8% Eckerd drugstores 3,642 3,562 2.2% 11,067 10,859 1.9% ------- ------- ------- ------- Total 7,985 7,872 1.4% 22,791 22,798 0.0% Margins and expenses - -------------------- Gross margin - LIFO Department stores and catalog 1,670 1,579 5.8% 4,444 4,400 1.0% Eckerd drugstores 832 823 1.1% 2,531 2,490 1.6% ------- ------- ------- ------- Total 2,502 2,402 4.2% 6,975 6,890 1.2% Selling, general and administrative (SG&A) expenses Department stores and catalog (1,463) (1,409) 3.8% (4,103) (4,051) 1.3% Eckerd drugstores (798) (744) 7.3% (2,325) (2,238) 3.9% ------- ------- ------- ------- Total (2,261) (2,153) 5.0% (6,428) (6,289) 2.2% Segment operating profit - LIFO Department stores and catalog 207 170 21.8% 341 349 -2.3% Eckerd drugstores 34 79 -57.0% 206 252 -18.3% ------- ------- ------- ------- Total 241 249 -3.2% 547 601 -9.0% Other unallocated (6) (4) N/A 12 (19) N/A Net interest expense (107) (97) 10.3% (319) (291) 9.6% Acquisition amortization (7) (8) -12.5% (25) (25) 0.0% Income from continuing operations ------- ------- ------- ------- before income taxes 121 140 -13.6% 215 266 -19.2% Income taxes (41) (51) -19.6% (74) (97) -23.7% ------- ------- ------- ------- Income from continuing operations 80 89 -10.1% 141 169 -16.6% ------- ------- ------- ------- Gain on sale of discontinued operations, net of tax - 34 N/A - 34 N/A ------- ------- ------- ------- Net income $ 80 $ 123 -35.0% $ 141 $ 203 -30.5% ======= ======= ======= ======= Earnings per share from continuing operations - diluted $ 0.27 $ 0.30 -10.0% $ 0.45 $ 0.55 -18.2% Earnings per share - diluted $ 0.27 $ 0.42 -35.7% $ 0.45 $ 0.68 -33.8%
13 weeks ended 39 weeks ended -------------- -------------- Oct. 25, Oct. 26, Oct. 25, Oct. 26, 2003 2002 2003 2002 ------- ------- ------- ------- SEGMENT FINANCIAL DATA: - ----------------------- Department stores and catalog Ratios as a % of sales: FIFO/LIFO gross margin 38.5% 36.6% 37.9% 36.8% SG&A expenses 33.7% 32.7% 35.0% 33.9% Segment operating profit 4.8% 3.9% 2.9% 2.9% Depreciation and amortization (1) $ 92 $ 90 $ 269 $ 276 Eckerd drugstores Ratios as a % of sales: FIFO gross margin 23.0% 23.3% 23.1% 23.2% LIFO gross margin 22.8% 23.1% 22.9% 22.9% SG&A expenses 21.9% 20.9% 21.0% 20.6% Segment operating profit 0.9% 2.2% 1.9% 2.3% LIFO charge $ 7 $ 9 $ 25 $ 33 Depreciation and amortization $ 77 $ 64 $ 215 $ 185 SUPPLEMENTAL DATA: - ------------------ Average shares outstanding (basic shares) 272.0 268.0 271.3 267.2 Average shares used for diluted EPS 298.0 292.2 273.8 269.7 Effective income tax rate for continuting operations 33.7% 36.3% 34.5% 36.4% BALANCE SHEET HIGHLIGHTS: - ------------------------ Cash and short-term investments $ 1,939 $ 1,748 FIFO inventory: Department stores and catalog 3,993 3,887 Eckerd drugstores 2,495 2,466 Long-term debt, including current maturities (2) 5,640 5,197 (1) Excludes $22 million of accelerated depreciation for catalog facilities for the 39 weeks ended October 25, 2003, which is included in Other Unallocated. (2) Excludes present value of operating leases and Eckerd's securitized receivables
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