J.C. Penney reports Q4 net income declined 13.4% year-over-year to $477 million, or $2.09/share due to a tax benefit last year, but on a continuing basis, EPS totaled $2.00, compared to $1.92 last year, beating analysts' estimates of $1.96 (Bloomberg) to $1.97 (Thomson) per share. Net sales rose 7.4% to $6.66b, beating analysts' expectation of $6.64b. Same store sales increased 2.2% on the quarter. 
Continuing EPS in Q4 and for the full year 2006 set new company records. An analyst at PNC Wealth Management says, "They have a lot of momentum. I think they're doing a great job with getting some of these new fresh private-label brands in their stores." J.C. Penney reports it expects to earn $0.99/share in Q1, coming up short of analysts' average estimate of $1.05. Its full year EPS target of $5.44 however, is two cents ahead of analysts' forecast. Shares of J.C. Penney are trading about 1.6% lower ($84.97) than yesterday's close in light pre-market trading.
Sources: Press release, Bloomberg, MarketWatch
Commentary: Retailers Post January Same Store Sales • Is Prudence Passé? Private Equity and LBO Cyclical Sector Targets • J.C. Penney Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: J.C. Penney (JCP). Competitors: Target (TGT), Federated Department Stores (FD), Kohl's (KSS). ETFs: PowerShares Dynamic Retail (PMR), Retail HOLDRs (RTH)
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