Plano, TX, April 20, 2006--J.C. Penney Co., executives said Wednesday that the department store chain will boost earnings and open 50 new stores per year, its most aggressive expansion in more than two decades.
CFO Robert B. Cavanaugh said earnings per share would rise about 16 percent per year through 2009, and sales at stores open at least a year will rise by low single digits.
Cavanaugh said the earnings growth would be driven partly by the burst of new stores and higher online sales. He made the comments during a meeting with analysts at the company's Plano headquarters.
Penney closed dozens of stores and delayed renovations at others early in this decade while it conserved cash and concentrated on a turnaround. With its profits and stock price surging, the company is thinking about expansion again.
After opening 14 stores in 2004, and 18 last year, Penney plans to add 27 stores this year and double that pace between 2007 and 2009. Up to 90 percent of the new stores will be outside of shopping malls, said Michael Dastugue, a Penney's real estate vice president.
The company plans at least four new stores apiece in Houston, Dallas, Denver, Phoenix, Minneapolis and Chicago.
Dastague said Penney would also renovate 250 of its 1,000-plus stores in the next four years. The new stores will help push Penney's capital spending from $535 million last year to $800 million this year and about $1 billion in future years, officials said.
Penney is also trying to attract younger shoppers with a newer, more hip image. For example, the company announced last week that it will open upscale Sephora cosmetics stores inside its own department stores beginning this fall.
