Nov. 5--J.C. Penney Co.'s October same-store sales fell 4.5 percent in October, better than what the company forecast, but below the analyst estimates. And the Plano-based department store raised its third-quarter earnings forecast slightly.

Analysts surveyed by Thomson Reuters had forecast a 2.3 percent drop, probably a reflection of the company's lopsided month.

Sales were better than expected during the first half of the month, but then turned softer and below expectations by the final week, Penney said.

October's strongest categories were women's apparel and shoes. Weakness persisted in fine jewelry. The southwest was the strongest region and the southeast the weakest.

The Plano-based department store chain had one of the industry's easiest year-ago comparisons.

Penney's same-store sales fell 13 percent in October 2008, as Americans kept the lid lowered on discretionary spending. A year ago, household budgets were shocked from every direction with a summer of higher gasoline prices, lower home values, mounting job losses and painful drops in 401(k)s.

The consumer still isn't out of the woods, and Penney expects November same-store sales to decline in the range of 4 to 7 percent. That compares to an 11.9 percent drop last year.

Penney expects third-quarter earnings to be in the range of 10 to 11 cents a share, including a charge of about 3 cents a share related to one-time real estate impairments. Penney's previous forecast was in the range of 3 cents to 10 cents a share. Analysts surveyed by Thomson Reuters expect earnings of 11 cents. Penney earned 55 cents a share in the third quarter of 2008.

Penney is confident about its holiday plans. Lower store inventories should preserve margins built into its planned -- but still aggressive -- promotions. The company is known for its efficient merchandise sourcing capabilities.

-----

To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com.

Copyright (c) 2009, The Dallas Morning News

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

JCP,

A service of YellowBrix, Inc.