J.C. Penney profit falls, forecast light

NEW YORK (Reuters) –

J.C. Penney Co Inc (JCP.N) said on

Friday quarterly profit fell 36 percent and forecast earnings

for the current quarter below Wall Street expectations, hurt by

cutbacks in consumer spending.

The mid-tier department store operator, whose shares fell 3

percent in pre-market trading, said net income fell to $117

million, or 52 cents per share, for its fiscal second quarter,

ended August 2, from $182 million, or 81 cents per share, a

year earlier.

Analysts on average had forecast earnings per share of 51

cents, according to Reuters Estimates.

The Plano, Texas-based company expects third-quarter

earnings of 70 cents to 75 cents per share, below the 76 cents

per share average forecast issued by analysts.

Sales and profits have been battered in recent months as

its middle-class shoppers tighten discretionary spending in

favor of necessities, squeezed by rising fuel and food prices,

declining home values and a credit crunch.

Last week Penney said July sales at stores open a least a

year fell a deeper-than-expected 6.5 percent.

“In this difficult consumer environment, we have continued

to focus on tightly controlling all aspects of our business,”

Penney Chief Executive Myron Ullman said in a statement.

The company has tried to protect margins through tighter

inventory controls, and said comparable store inventory levels

at the end of the second quarter were lower than a year ago.

For the quarter, total sales fell 2.5 percent, while

same-store sales dropped 4.3 percent. Sales of women’s apparel

and shoes were stronger than other items on a relative basis,

while sales of home goods and jewelry were the weakest.

Penney forecast a decrease in total sales for the third

quarter in the low-single digit percentages, with same-store

sales falling in the mid-single digit percentages.

Penney shares fell to $35.70 from its close of $36.83 on

Thursday.

(Reporting by Michele Gershberg; Editing by Steve Orlofsky

and Derek Caney)