Welcome to the JCPenney call to discuss monthly sales. I am Kristin Hays, Manager of Investor Relations.
First, please note that this call includes forward-looking statements within the meaning of the Private tiffany earrings Litigation Reform Act of 1995, which reflect the Company’s current view of future events and financial performance. The words expect, plan, anticipate, believe and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties and the Company’s future results of operations could differ materially from historical results or current expectations. For more details on these risks, please refer to the Company’s Form 10-K and other SEC filings. Also, please note that no portion of this call may be republished, reproduced or rebroadcast in any form without the prior written consent of JCPenney.
Now, let’s discuss our sales results for the month of August. For the four weeks ended August 30, 2008, comparable store sales decreased 4.9%, which was in line with the Company’s guidance for a mid-single-digit decrease. In last year’s August period, comparable store sales decreased 2.4%. For the month, total Company sales decreased 3.2% and Internet sales through jcp.com increased 7.6%. For August, the Central and Northwest regions performed the best, while the Southeast region experienced the weakest results. Women’s apparel and family shoes were the best-performing merchandise divisions during the month, with home and fine jewelry recording the weakest results.
Regarding the back-to-school performance, while business overall has been challenging compared to last year, tiffany pendants are continuing to respond well to our new and enhanced back-to-school offerings, including new brands Decree, Fabulosity, Whitetag and Dorm Life. Our new Linden Street brand in home has also been well-received.
As to weekly sales trends, sales were softest during the first week of the August reporting period. Sales improved during the last three weeks, as customers chose to shop later in the back-to-school season. The trend of customers delaying their appointment shopping until closer to the actual calendar event is consistent with the pattern the Company has experienced with other events over the last year. Overall, mall traffic continued to experience mid-single-digit declines, with JCPenney’s mall locations seeing smaller declines than the rest of the mall. The Company’s off-mall stores continued to see stronger traffic trends than mall locations.
During the month, AUR increased slightly, transactions were about flat and total units and units per transaction decreased. With respect to inventory, the Company continues to expect that total inventory will be below last year’s levels at the end of the back-to-school shopping season.
With that, let me turn to management’s outlook for September sales. Management’s guidance for the month of September is for comparable store sales to decrease mid to high single digits, compared to a 3.7% decrease during last year’s September period. The Company expects some negative impact in sales results from disruptions due to hurricanes affecting the Southeast region. JCPenney will release its September sales results before the market opens on Wednesday, October 8, 2008, one day earlier than originally scheduled date of October 9, which coincides with the observance of Yom Kippur. The related sales recording will be available at the same time as the sales release on October 8. As a reminder, JCPenney’s Chairman and CEO Mike Ullman will be presenting at 10:25 a.m. Eastern Time today, September 3, at the Goldman Sachs Global Retail Conference in New York City. A webcast link to Mr. Ullman’s presentation at the conference is available on the JCPenney investor relations page at JCPenney.net.
Thank you for listening to the August 2008 JCPenney sales call.
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