Counting Penney's

The accumulated details of the multi-dimensional J.C. Penney Co. (Plano, Texas) produced the disappointing result of an overall third-quarter net loss of $30 million (compared with net income of $142 million in last year's third quarter). Penney's report included its stores and catalog operations, Eckerd Drugstores, Direct Marketing and corporate real estate and investment gains and losses.

The stores and catalog operations showed a sharp decline in sales of stores open a year. Department store same-store sales declined 3.7 percent, and catalog sales decreased 5.4 percent from last year's period. However, e-commerce sales – which are included as a component of catalog sales – totaled $73 million this quarter, compared with $20 million last year. The company has devoted a large amount of resources and personnel to developing its online operations.

Eckerd Drugstores reported same-store sales increases of 9.1 percent for the quarter, but an operating loss of $63 million. (A year ago, it reported an operating profit of $23 million.) Sales, broken down, comprised of a 14.8 percent increase in pharmacy sales and a 1.0 percent decrease in general merchandise sales. The company said that gross margin was impacted by declines in higher-margin general merchandise sales and an increased proportion of lower-margin managed care pharmacy sales.

J.C. Penney Co. operates approximately 1100 JCPenney department stores in all 50 states, Puerto Rico, and Mexico. In addition, the company operates 48 Renner department stores in Brazil. Eckerd operates over2600 drugstores located throughout the Southeast, Sunbelt and Northeast regions of the United States. JCPenney Catalog, including e-commerce, is the nation's largest catalog merchant of general merchandise. J.C. Penney Direct Marketing Services, Inc. markets insurance products and membership services tovarious credit card customers by direct response solicitations primarily in the United States and Canada.