NEW YORK — J.C. Penney Co. Inc.'s profits sank 33 percent in the latest quarter due to charges related to its planned sale of its Eckerd drugstores, but the retail heavyweight's results still beat Wall Street expectations.
Saks Inc.'s quarterly profit jumped 53 percent, boosted by double-digit sales growth at its Saks Fifth Avenue stores, while jeweler Zale Corp. saw its profit rise 23 percent, helped by tighter inventory controls and new merchandising initiatives. Results for both companies were in line with Wall Street's projections.
However, the mood left by Tuesday's reports was tempered as Penney's chairman and CEO offered a cautious earnings and sales outlook, citing the uncertain economic and geopolitical climate.
"There is this tug of war going on with two sets of factors," said Ken Perkins, research analyst at Thomson Financial. "The economy is humming along, the employment picture is improving. But on the other hand, there are consumer worries about rising interest rates, rising energy prices and geopolitical uncertainty."
J.C. Penney, based in Plano, Texas, earned $41 million, or 13 cents per share, in the three months ended May 1, compared with $61 million, or 20 cents per share, a year earlier.
Excluding $77 million in Eckerd-related charges, the company said it would have earned 38 cents per share from continuing operations, compared to 5 cents per share a year ago.
Analysts surveyed by Thomson First Call had expected profit of 34 cents per share, excluding Eckerd. The company had tipped analysts to expect earnings of 30 cents to 35 cents per share.
Penney shares jumped $2.11, or 6.7 percent, to close at $33.71 on the New York Stock Exchange.
Saks, based in Birmingham, Ala., earned $22 million, or 15 cents a share, for the three months ending May 1, versus $14.4 million, or 10 cents a share, a year ago.
Excluding charges of 2 cents a share from the write-off of assets, Saks earned 17 cents per share to match the expectations of analysts surveyed by Thomson First Call.
Net sales rose more than 11 percent to $1.54 billion, compared with analyst forecasts of $1.49 billion.
Saks shares rose 12 cents to close at $14.10 on the NYSE.
Zale, the jewelry retailer based in Irving, Texas, earned $11.5 million, or 43 cents per share, in the three months ended April 30, compared with $9.4 million, or 29 cents per share, a year ago.
That matched the forecast of analysts surveyed by Thomson First Call.
Revenue rose to $483 million from $449 million in the same period last year. Same-store sales were up 7.2 percent.
Shares of Zale rose 47 cents to close at $53.27 on the NYSE.
Contributing: Dave Koenig