Key Quotes From JCPenney on Retail, Credit Cards

From retailer JC Penney's Q308 conference call:

 

e-Commerce:

J. C. Penney’s leading Internet business, one of the largest general merchandise e-commerce sites, has also been impacted by the weakness in home division sales. For the quarter jcp.com sales decreased approximately .3% versus an 11.8% increase last year, as a result of home merchandise comprising a significantly larger portion of catalogue and online sales than it does in our stores.

As Visa (V) and Mastercard (MA) reported, credit card use is down:

What has changed recently is we see more debit cards and more cash. There hasn’t been a remarkable change in our own card credit. We expect that to change going forward as we re-evaluate how we are going to offer our own credit, at the end of our current agreement with our provider.

Q4 will not be better:

It is clear that the worst week thus far in the fall from all traffic was the first week of October and I think the first week of November is also not up to expectations of major shopping spenders.

Pension trouble:

As of November 1, 2008, the asset values [in our pension fund] had declined from approximately $5.2 billion at the beginning of the year to approximately $4.0 billion. The return on plan assets as of November 1, 2008, since the beginning of the year, was about (22%), based largely on the increase in the amortization of the accumulated, unrecognized actuarial loss, our pension expense under this scenario would be approximately $180.0 million.

The pension expense is a non-cash item and even at 2008 third-quarter-ending asset values, our plan remains fully funded… We do not expect to be required to make a contribution to the plan during 2009.