From:  KHOU HOUSTON

Associated Press, February 20, 2009

NEW YORK — J.C. Penney Co. reported a 51 percent drop in fourth-quarter profits as customers sharply cut spending on clothing and other more discretionary purchases as the recession deepened. The department store chain also said that losses in the first quarter would be wider than analysts had predicted amid a deteriorating environment.

The Plano-based retailer said Friday that earnings for the three-month period ended Jan. 31 were $211 million, or 95 cents per share. That compares with $430 million, or $1.93 per share in the year-ago period.

Sales dropped almost 10 percent to $5.76 billion from $6.39 billion in the year-ago period.

Analysts surveyed by Thomson Reuters expected 92 cents per share on revenue of $5.76 billion.

Same-store sales or sales at stores opened at least a year fell 10.8 percent in the quarter.

Same-store sales are considered a key performance indicator because they measure growth at existing stores rather than newly opened ones.

“Throughout the year, we took steps to significantly reduce our inventories and operating expenses in order to withstand the impact of the economic conditions,” said Myron E. Ullman III, chairman and chief executive in a statement. “At the same time, we stepped up the style we offer and focused on effectively communicating the newness, excitement and value in our merchandise.”

Penney said that as of Jan. 31, the company had cash and cash equivalents of $2.4 billion and long-term debt of $3.5 billion. Merchandise inventories totaled $3.3 billion and were about 13.5 percent lower than last year on a same-store sales basis. Capital expenditures were approximately $970 million in 2008, moderately lower than the company’s $1 billion plan.

Penney said that it expects a per-share loss of anywhere between 20 cents to 30 cents in the first quarter. Analysts expect a loss of 19 cents, according to Thomson. Penney also said total sales would decline anywhere from 10 percent to 13 percent and that same-store sales would drop between 12 percent and 15 percent in the first quarter.

Macy's flagship store in New York City.

From:  Southern Ledger

Macy’s Inc. swung to a loss in its fiscal third quarter as sales dropped more than 7%, with the retailer saying the holiday season would be a nail-biter and it saw no benefit in being optimistic for next year.

The department store operator also said Wednesday that it slashed its budget for 2009 capital expenditures by almost half as it navigated the deteriorating economy. Macy’s reiterated its profit outlook for the year but said it would be at the low end of the range if current sales trends continued.
As for the upcoming holiday season, “it will be a nail-biter,” Chief Financial Officer Karen Hoguet told analysts in a conference call. She also noted that Macy’s planned to have inventories for spring and fall 2009 below last year’s levels, saying, “We don’t see an upside in being optimistic.”

Macy’s said it lost $44 million, or 10 cents a share, in the quarter ended Nov. 1, after a profit of $33 million, or 8 cents, a year earlier. Excluding costs related to the consolidation of three regional divisions that totaled $16 million — $10 million after tax or 2 cents a share — the loss was 8 cents a share.

Sales fell to $5.49 billion; analysts surveyed by Thomson Reuters were expecting, on average, a loss of 19 cents a share on $5.49 billion in sales.
Shares of Cincinnati-based Macy’s fell $1.04, or 11.1%, to $8.37 after the earnings news.

From:  Denver Post

NIWOT, Colo.  

Crocs Inc. said Wednesday it swung to a third-quarter loss of nearly $148 million as sales of the company’s colorful plastic clogs plunged by nearly one-third amid a deteriorating U.S. economy and retail environment.

The loss included one-time charges of $104 million reflecting the declining value of the shoe maker’s business, and Crocs issued a fourth-quarter financial forecast far below Wall Street expectations.

Crocs reported a net loss of nearly $148 million, or $1.79 per share, for the three months ended Sept. 30, compared with net income of $56.5 million, or 66 cents per share, a year ago.

Revenue dropped 32 percent to $174.2 million from $256.3 million. The latest quarter’s revenue fell far short of the forecast of analysts surveyed by Thomson Reuters, who had expected $201.7 million, on average.

Crocs recorded a $70 million charge in the latest quarter from writing down the value of inventory and expected losses on inventory purchase commitments. The Niwot, Colo.-based company took an asset impairment charge of $36.1 million that included a write-off of excess equipment and tooling. Crocs recorded a $2.5 million restructuring charge from the closure of Canadian manufacturing and distribution operations.

The company also reported a loss of about $14.6 million from unfavorable currency exchange rates, and increased its provision for returns and allowances by $19.5 million from a year earlier.

“Our performance was below expectations and continued to be impacted by the extremely challenging retail environments in the U.S. and Europe during the third quarter,” said Ron Snyder, president and chief executive. “Based on current trends we have lowered our projected sales volumes and made the strategic decision to further right-size our operations to better align with our lower volumes and revenues.”

Citing the weak economy, Snyder said Crocs plans to reduce capital expenditures by about 50 percent next year compared with 2008.

Crocs reported quarterly results after its shares fell 25 cents, or nearly 12 percent, to $1.90 during the regular session. Its shares are down sharply from a 52-week high of $46.80 reached in December.

       

Crocs, Inc.     1.05 -0.85 (-44.68% )