Penney's, Kohl's, Nordstrom report strong sales

PLANO, Texas -- Mid-price department store powerhouses J.C. Penney Co. and Kohl's turned in solid profits that beat analysts' expectations, even as their middle-class consumers struggle with high gasoline prices and a weak housing market.

Kohl's said earnings jumped 15.9 percent, and officials said the back-to-school season was off to a good start.

Penney's profit edged up nearly 2 percent. However, company officials said sales of home furnishings were hurt by sluggish sales of new and existing homes.

At Nordstrom, a more upscale department store chain, earnings rose less than 1 percent as expenses related to the company's credit card business cut into solid sales. Nordstrom officials said in a conference call they are noticing more people starting to fall behind on credit card payments compared to a year ago.

The results at all three chains were better than those reported a day earlier by Macy's, which suffered a 77 percent plunge in second-quarter profit and said the third quarter could be worse than Wall Street expected.

Penney Chairman and Chief Executive Mike Ullman said customers were worried about high energy prices and the housing slowdown, but sales of most items other than home furnishings were solid. He said the Plano-based company saw no indications of delinquencies or bad debt on credit card accounts.

Penney said it earned $182 million, or 81 cents per share, in the quarter ended Aug. 4. That was up from $179 million, or 76 cents per share, a year earlier. Earnings from continuing operations increased to 78 cents per share. On that basis, analysts surveyed by Thomson Financial expected 77 cents per share.

Second-quarter sales rose nearly 4 percent to $4.39 billion from $4.24 billion a year ago. Same-store sales at locations open at least a year rose 1.9 percent.

Kohl's said it earned $269.2 million, or 83 cents per share, compared to $232.4 million, or 69 cents per share a year ago. Analysts had expected 82 cents per share, according to Thomson.

Sales rose 8.7 percent, to $3.60 billion from $3.30 billion a year ago. Same-store sales rose 1.3 percent at Kohl's, based in Menomonee Falls, Wis.

Seattle-based Nordstrom said it earned $180.4 million, or 71 cents per share, up from $178.8 million, or 67 cents per share, a year earlier. Analysts had expected 69 cents per share, according to Thomson.

Sales rose 5 percent, to $2.39 billion. That edged analysts' forecast of $2.38 billion. Same-store sales rose 5.9 percent.