Its shares rose 6.8 percent to $13.12 in early trading, the
highest level since before the 2008 financial crisis that
decimated luxury sales in the United States.

Saks said sales at stores open at least a year increased 5.9
percent in the quarter that ended May 4, well above the 2.6
percent increase Wall Street was expecting, according to Thomson
Reuters I/B/E/S, and better than Nordstrom and Bloomingdale’s, a
unit of Macy’s Inc.

Expectations had been low given that Saks offered steeper
discounts in the quarter than a year earlier, and after the soft
results of its rivals. Lazard Capital Markets analyst Jennifer
Davis called Saks’ results “better than feared.”

Sales at its famed Fifth Avenue flagship in New York, which
generates one-fifth of sales, rose at a more modest pace, the
company said.

Saks is in the midst of a multi-year, $95 million effort to
upgrade its computer systems to improve online sales. Nordstrom
and Macy’s Inc have spent hundreds of millions of dollars
integrating their e-commerce and physical stores and are now
able to use their stores to fulfill online orders, a boon for
both.

Saks already offers online shopping for its full-service
department store chain, but said on Tuesday it was moving up the
launch of an e-commerce site for its Saks Off Fifth chain to
autumn 2013 from a launch planned for 2014. That will cost Saks
up to $6 million more the previously forecast.

Nordstrom and Neiman Marcus have long offered e-commerce for
their respective outlet chains of lower-priced merchandise.

Overall sales at Saks were $793.2 million, above the $776.8
million Wall Street had forecast.

The luxury chain said same-store sales for the balance of
the year should be up 4 percent to 6 percent.

Saks reported a profit of $20 million, or 13 cents per
share, for the quarter that ended May 4, versus a year-earlier
profit of $32.1 million, or 18 cents per share. Excluding
one-time items, Saks had a profit of 19 cents per share, in line
with Wall Street estimates.

Penney reported another steep quarterly loss on weak sales
and heavy clearance deals, but Ullman said the company has taken
steps in recent weeks to reassure vendors, shore up its
finances, and win back shoppers that defected after a move last
year away from coupons.

“This won’t happen overnight,” Ullman said on a conference
call with analysts, of Penney’s efforts to recover lost revenue.
“Rest assured, we recognize the magnitude of the challenges that
we face.”

Under Ullman, who returned as CEO last month to replace his
successor Ron Johnson, Penney has secured a new $1.75 billion
loan and brought back brands such as St. John’s Bay.

That brand alone brought in $1 billion in sales a year
before Johnson dropped it for more fashionable lines.

The department store chain suffered a net loss of $348
million for the quarter ended May 4, or $1.58 per share, more
than twice the $163 million, or 75 cents per share it lost last
year. Gross profit margin fell 6.8 percentage points to 30.8
percent of sales as it slashed prices to move inventory.

Total sales fell 16.4 percent to $2.67 billion, in line with
the company’s warning last week.

Despite the wider loss, shares slipped only 2 percent to
$18.42 as analysts dismissed it as a remnant of the Johnson era.

The shares have climbed nearly 40 percent since Ullman
returned to the chain, which is showing signs of getting back on
track. Ullman was CEO from 2004 to 2011.

“Trends are improving – this is still a year of change. But
things are stabilizing and traffic is improving,” said Marie
Driscoll, an independent retail analyst, referring to the volume
of visits by shoppers.

In addition to a new pricing strategy, Johnson’s vision was
to roll out dozens of boutiques within Penney’s larger stores
over the course of four years to showcase hipper, but affordable
brands and offer exclusive merchandise.

Ullman never mentioned Johnson by name on the call, but
indirectly praised his efforts, noting that brands that Johnson
brought in such as home goods designer Jonathan Adler and
clothes designer Nanette Lepore were attractions that bring in
new shoppers.

Still, after burning through $948 million cash in the first
quarter to roll out shops, including a new home goods section
being launched in June, Penney is not planning any new boutiques
for now, Ullman said.

Earlier this week, rivals Kohl’s Corp and Macy’s Inc
each reported lower than expected same-store sales for the
quarter, noting cautious shoppers in the lower-to-middle class.
But they expect sales to rise this quarter.

Wal-Mart reported a 1.4 percent drop in sales at Walmart U.S. stores open at least a year, and gave a profit forecast for the second quarter that missed Wall Street estimates. The world’s largest retailer expects same-store sales at its namesake U.S. discount chain to be up 2 percent at best in the current quarter.

Kohl’s Corp (KSS.N: Quote, Profile, Research, Stock Buzz), a department store chain that caters to lower-to-middle income families, posted a 1.9 percent decline in same-store sales. Last week, J.C. Penney Co Inc (JCP.N: Quote, Profile, Research, Stock Buzz), dealing with some self-inflicted problems, said its same-store sales fell 16.6 percent. Dillard’s Inc (DDS.N: Quote, Profile, Research, Stock Buzz) reported a 1 percent increase.

“We are seeing some weakness amongst our more budget-conscious, what we call deal-hunting, customers,” Macy’s Chief Financial Officer Karen Hoguet told analysts this week.

Macy’s first-quarter same-store sales rose 3.8 percent, slightly below Wall Street’s expectations.

Though splurging on more fashionable clothing may be on the rise, retailers are noting that shoppers’ top priority is buying basics at a good price.

“There’s going to be some choppiness” in any recovery of consumer demand given how easy it is to spook shoppers, said ITG analyst John Tomlinson.

Wal-Mart has many shoppers who live paycheck to paycheck. The company’s CFO Charles Holley said his customers’ top concern is still jobs, followed by food costs and gas prices.

Kohl’s said sales of merchandise by fashion designer Derek Lam, who also sells pricier clothes at luxury chain Neiman Marcus NMRCUS.UL, were disappointing in April as customers moved toward basics.

“We have to continue to improve the quality of our merchandise and offer items at a great value,” Kohl’s CEO Kevin Mansell told analysts.

WEATHER WOES

Sales at several U.S. chains during the first quarter were hurt by cold weather that prompted many shoppers to delay purchases of spring clothing and sporting goods.

“Though no one likes to talk about weather, it was a real factor across the United States,” said Mike Duke, CEO of Wal-Mart Stores.

The problem was visible in the company’s own backyard. In Bentonville, Arkansas, where Wal-Mart is based, daily May temperatures typically reached highs in the 70s. Earlier this month, the area was hit with snow.

(Reporting by Phil Wahba in New York and Jessica Wohl in Chicago. Editing by Christopher Wilson)

(Reuters) – J.C. Penney Co Inc (JCP.N: Quote, Profile, Research, Stock Buzz) Chief Executive Myron Ullman told Wall Street on Thursday that the department store chain is emerging from what he called an abyss but warned he needs time to fix the issues of the retailer.

Penney reported another steep quarterly loss on weak sales and heavy clearance deals, but Ullman said the company has taken steps in recent weeks to reassure vendors, shore up its finances, and win back shoppers that defected after a move last year away from coupons.

“This won’t happen overnight,” Ullman said on a conference call with analysts, of Penney’s efforts to recover lost revenue. “Rest assured, we recognize the magnitude of the challenges that we face.”

Under Ullman, who returned as CEO last month to replace his successor Ron Johnson, Penney has secured a new $1.75 billion loan and brought back brands such as St. John’s Bay.

That brand alone brought in $1 billion in sales a year before Johnson dropped it for more fashionable lines.

The department store chain suffered a net loss of $348 million for the quarter ended May 4, or $1.58 per share, more than twice the $163 million, or 75 cents per share it lost last year. Gross profit margin fell 6.8 percentage points to 30.8 percent of sales as it slashed prices to move inventory.

Total sales fell 16.4 percent to $2.67 billion, in line with the company’s warning last week.

Despite the wider loss, shares slipped only 2 percent to $18.42 as analysts dismissed it as a remnant of the Johnson era.

The shares have climbed nearly 40 percent since Ullman returned to the chain, which is showing signs of getting back on track. Ullman was CEO from 2004 to 2011.

“Trends are improving – this is still a year of change. But things are stabilizing and traffic is improving,” said Marie Driscoll, an independent retail analyst, referring to the volume of visits by shoppers.

In addition to a new pricing strategy, Johnson’s vision was to roll out dozens of boutiques within Penney’s larger stores over the course of four years to showcase hipper, but affordable brands and offer exclusive merchandise.

Ullman never mentioned Johnson by name on the call, but indirectly praised his efforts, noting that brands that Johnson brought in such as home goods designer Jonathan Adler and clothes designer Nanette Lepore were attractions that bring in new shoppers.

Still, after burning through $948 million cash in the first quarter to roll out shops, including a new home goods section being launched in June, Penney is not planning any new boutiques for now, Ullman said.

Earlier this week, rivals Kohl’s Corp (KSS.N: Quote, Profile, Research, Stock Buzz) and Macy’s Inc (M.N: Quote, Profile, Research, Stock Buzz) each reported lower than expected same-store sales for the quarter, noting cautious shoppers in the lower-to-middle class. But they expect sales to rise this quarter.

(Reporting By Phil Wahba and Ben Berkowitz; Editing by Bernard Orr)

The retailer also reported a better-than-expected
first-quarter profit, helped by signs that it is finally beating
a problem that deviled it last year – not ordering the styles
and stock that shoppers wanted.

Kohl’s shares were up 4.7 percent at $52.00 at midday.

Last year, the company often frustrated Wall Street by
ordering too much inventory, with much of it ending up being
heavily discounted, or ordering too little, hurting sales.

Despite a 1.9 percent drop in sales at stores open at least
a year in the first quarter, gross profit margin on merchandise
rose 0.5 percentage point to 36.4 percent of sales.

“This suggests that sales in the quarter were not so
promotion-driven and that they’re getting a better handle on
their inventory planning,” Edward Jones analyst Brian Yarbrough
told Reuters.

In the last year, Kohl’s has brought in many new merchants,
the people who decide what the department store will sell, and
new operations planners. Yarbrough said the changes are starting
to pay off.

(For a graphic comparing Kohl’s and J.C. Penney, click on link.reuters.com/kap28t)

On a call with Wall Street investors, Chief Executive Kevin
Mansell said there was “a lot of pent-up demand” for spring
merchandise that would help sales now that weather is warming up
in the northern United States. Kohl’s expects same-store sales
to increase as much as 2 percent in the current quarter, which
includes the start of the back-to-school season.

In the first quarter, comparable sales were down 8 percent
for seasonal merchandise like T-shirts, shorts and sandals,
Mansell said.

On Wednesday, Macy’s Inc Chief Financial Officer Karen
Hoguet also said warmer temperatures in May would likely help it
make up some lost business.

Kohl’s posted net income of $147 million, or 66 cents per
share, for the fiscal first quarter that ended May 4, beating
analysts’ average forecast by 10 cents, according to Thomson
Reuters I/B/E/S. A year earlier, the company earned $154
million, or 63 cents per share.

Sales fell 1 percent to $4.20 billion, slightly below the
average forecast of $4.26 billion.

E-commerce sales jumped 31 percent as Kohl’s continued to
invest in technology and move toward being able to fill online
orders from its stores.

The company forecast earnings of $1.00 to $1.08 per share
for the second quarter on sales growth of 1 percent to 3
percent.

(Reporting by Phil Wahba in New York and Siddharth Cavale in
Bangalore; Editing by Sriraj Kalluvila and John Wallace)

The company also raised its quarterly dividend 25 percent,
and its shares were up 1.2 percent to $47.84 in morning trading.
On Tuesday the shares hit their highest levels in decades.

The retailer, which operates the Macy’s and high-end
Bloomingdale’s chains, said comparable sales rose 3.8 percent in
the quarter. Overall sales were in line with expectations,
according to Thomson Reuters I/B/E/S, increasing 4 percent to
$6.39 billion.

Macy’s has benefited from large investments in technology in
recent years, which have allowed it to use its stores to deliver
orders placed online, fueling its e-commerce and giving it an
edge over many department store rivals.

It has also gotten a bump from a sharp sales decline at
rival J.C. Penney Co Inc and a middling performance at
Kohl’s Corp.

“I do think these guys (Macy’s) continue to take share from
the J.C. Penneys of this world and the Kohl’s of the world,”
Edward Jones analyst Brian Yarbrough told Reuters.

Macy’s has managed to offer better merchandise in recent
years while also keeping up the promotions that mid-tier
department store customers demand, Yarbrough said.

Merchandise inventory levels were up 3 percent at the end of
the first quarter, roughly in line with expected sales gains,
lowering the potential damage to profit if Macy’s has to
discount more than expected because shoppers pull back.

J.C. Penney last week reported same-store sales fell 16.6
percent in the first quarter, still feeling the effects of the
company’s decision last year to eliminate most discounting, a
strategy it has since dropped. Kohl’s is expected to report a
0.1 percent decrease in same-store sales when it posts results
on Thursday.

Among department store operators, analysts expect only
Nordstrom Inc to outperform Macy’s in the first quarter.

Still, Macy’s Chief Executive Terry Lundgren said the
company saw “weakness” in parts of its clientele, particularly
its most price-conscious shoppers and its Bloomingdale’s
customers.

U.S. retail sales in April were dented by cool weather in
large parts of the country, which prompted many consumers to
delay spring shopping, and by lingering concerns about the state
of the job market.

Macy’s posted net income of $217 million, or 55 cents share,
for the quarter that ended May 4, up from $181 million, or 43
cents per share, a year earlier, and topping analysts’ average
forecast by 2 cents.

Despite the higher-than-expected profit, Macy’s left its
full-year earnings forecast unchanged at $3.90 to $3.95 a share
on a same-store sales rise of 3.5 percent.

The company boosted its quarterly dividend to 25 cents a
share from 20 cents and increased its share repurchase
authorization by $1.5 billion.

Twelve major U.S. retailers reported a 3.7 percent increase
in April sales at stores open at least a year, according to
Thomson Reuters same-store sales index. That was less than the
4.3 percent increase Wall Street expected.

Wall Street got ahead of itself with upbeat expectations,
said AlixPartners’ Managing Director Steve Nevill, noting that
unemployment remained high and consumers were still worried
about their prospects.

“I still don’t see us breaking out of this average
performance until something big happens to lift consumer
confidence,” Nevill said.

L Brands Inc, which operates Victoria’s Secret, said
sales at stores open at least a year, were up 2 percent last
month, but missed analysts’ estimates at all of its major
brands, including Bath & Body Works. The stock was down 1.1
percent.

Costco Wholesale Corp reported a 4 percent gain,
slightly less than expected, in part because of sharply lower
gas prices. Still, the warehouse club operator said sales of
food and consumer electronics were good. Cost shares fell 0.5
percent

In contrast, so-called off-price chains TJX Cos Inc,
which operates T.J. Maxx and Marshalls, and Ross Stores Inc
both easily beat Wall Street targets, the latest proof
that shoppers remained price conscious despite gradual
improvements in the job market.

Ross raised its first-quarter profit forecast after
reporting a 7 percent gain in same-store sales. Larger rival TJX
Cos said same-stores sales rose 8 percent last month. TJX Cos
shares added 0.6 percent, while Ross was up 0.2 percent.

Because of the timing of Easter, March sales numbers were
artificially low, while April got a boost. Taken together,
retail spending grew about 2 percent, roughly in line with
trends in the last two years, said International Council of
Shopping Centers Chief Economist Michael Niemira.

Spending is not expected to rise much faster than that in
the coming months as consumers wrestle with a variety of
worries, including the U.S. economy, Europe’s economic problems,
the debt debate in Washington and employment.

The ICSC expects same-store sales to increase 2 percent to 3
percent this month.

Gap Inc, the last company in the Thomson Reuters
Same-Store Sales Index to report, will release its numbers after
the stock market closes.

The S&P Retail Index was up 0.1 percent at midday.

LOTS OF DISCOUNTING

With the weather cool in much of the country in April, many
shoppers’ delayed purchases of spring clothing.

Janney Capital Markets analyst Adrienne Tennant said in a
note this week that retailers were more aggressive in offering
discounts in April, but things eased at the end of the month,
suggesting stores had not over-ordered and making it likely they
would avoid panicked markdowns.

Fred’s Inc and Cato Corp each reported
slim sales gains last month.

Retailers that don’t report monthly sales posted
disappointing numbers. Ann Inc, the parent of the Ann
Taylor chain, and Wet Seal Inc each recorded declines
in same-store sales for the first quarter.

Last week, drugstore chain Rite Aid Corp said
same-store sales fell 4 percent in April, largely as many
lower-cost generic drugs came to market in the last year. Larger
rival Walgreen Co reported a modest 1.2 percent rise,
hurt by a drop in sales of general merchandise.

Others did manage to buck the trend. Teen retailers The
Buckle Inc and Zumiez Inc reported much
better-than-expected April sales on Thursday, and American
Apparel Inc had a 3 percent gain. Zumiez shares jumped
nearly 4 percent, while Buckle added 1.3 percent.

As previously announced, TJX and Ross will no longer report
monthly sales after April. That will leave 11 U.S. chains
reporting monthly sales, down from a peak of 68 in 2006. In the
years since, big names such as Macy’s Inc, Wal-Mart Stores
Inc and Best Buy Co Inc have dropped out of the
same-store sales index.

(Reuters) – Shares in Barnes & Noble Inc rose 18 percent on Thursday after a report that Microsoft Corp is considering an offer to acquire the tablet and e-book business of B&N’s Nook Media unit.

The technology website TechCrunch reported that Microsoft, which already owns a 17 percent stake in Nook Media, was proposing a $1 billion offer to buy all of Nook’s digital assets. A source familiar with the document cited by TechCrunch confirmed its authenticity.

The report also suggested that Nook would stop selling Android-based tablets entirely by the end of fiscal 2014 in favor of distributing content via other publishers’ platforms.

It was not clear from the TechCrunch story whether Microsoft had formally made an offer to the B&N board or whether B&N had replied.

The New York Times reported that the documents TechCrunch cited were several weeks old and that any deal – if one is even pending – was not imminent.

B&N and Microsoft both declined to comment.

Microsoft acquired its stake in the Nook Media unit a little more than a year ago in a deal that valued the entire business at $1.7 billion. In December the British publisher Pearson Plc bought a stake in the unit at a $1.8 billion valuation.

But Nook Media sales have disappointed since. Revenue dropped 26 percent in the most recent holiday quarter as Nook sold fewer digital readers and tablets and had to cut prices. Just this week B&N slashed the price of its best tablet by one-third as a special promotion for Mother’s Day.

Barclays analyst Alan Rifkin, in a note to clients on Thursday, said a lower valuation for the Nook Media unit was appropriate and that $1 billion was even higher than he had modeled.

B&N shares rose 18 percent to $21.02 in midday trading. The stock last traded at those levels a year ago, around the time of the Microsoft investment.

The stock is heavily shorted, with almost 36 percent of its float sold short as of April 15. Short sellers borrow stocks and sell them, betting the price will fall. Where short interest is high, that can exacerbate a rally, as people rush in to cover their positions.

Credit Suisse, in a note to clients, said the suggested terms of the Microsoft offer implied that Barnes & Noble was worth about $27 per share.

COLLEGE UP IN THE AIR

Nook Media also includes a college bookstore chain, but the TechCrunch report suggested the Microsoft offer would include only the e-book, digital reader and tablet assets.

If Microsoft carves the college bookstore chain out of the Nook Media unit, and B&N takes back those stores, Credit Suisse said the valuation of B&N could rise even higher.

While the college bookstore chain has provided B&N with much needed cash, sales have been weak. In the first three quarters of the fiscal year, sales fell 0.3 percent, while operating profit fell 7 percent to $115.8 million.

The college textbook business is undergoing a transformation with the shift to digital, as publishers move away from large, heavy books that last for years to multiple packages with smaller bites of content.

Companies like News Corp and Apple have started to make plays on the digital textbook market as that shift accelerates.

COULD SPEED OTHER SALES

Earlier this year, B&N Chairman Leonard Riggio said he wanted to buy the company’s chain of nearly 700 namesake bookstores. Selling off Nook could simplify that process, especially if it reunited Riggio with the college bookstore business, which he sold to B&N in 2009.

B&N first indicated it might spin off the Nook business in early 2012. The retailer has spent hundreds of millions of dollars on the unprofitable unit, trying to make its devices competitive against devices from Amazon, Apple and Google, among others.

The latest IDC market share data for tablets, released earlier this month, leaves B&N out of the industry’s top five vendors, suggesting it has less than 2 percent of the global market.

B&N has typically launched a new edition of the Nook every year. But this year it simply updated its high-definition tablets by adding Google’s app store, which a number of analysts saw as an easy way for the company to launch a “new” Nook.

One uncertainty in any Microsoft bid is how Liberty Media would respond. It holds preferred shares in B&N that, if converted, would represent 17 percent of the company. Liberty was not immediately available to comment.

One analyst following Barnes & Noble said a Microsoft deal, if it happens, would be dramatic but not necessarily surprising.

“We must be careful here because details are lacking, but with devices phasing out, we see sale of the digital assets as an effective sale of the entire Nook business, unless co-ownership or leasing of digital content is arranged,” Stifel analyst David Schick said in a research note.

(Reporting by Phil Wahba and Ben Berkowitz; Additional reporting by Liana B. Baker; Editing by Alden Bentley, Theodore d’Afflisio and John Wallace)

Costco reported a 4 percent gain in sales at stores open at
least a year, slightly less than expected because of sharply
lower gas prices compared with a year ago. Still, the warehouse
club operator said sales of food and consumer electronics were
good.

L Brands same-store sales were up 2 percent, but sales were
disappointing at all its major brands, including Bath & Body
Works, and the company missed forecasts of a 4.6 percent again.

Analysts expect 13 U.S. retailers who still report monthly
sales, including T.J. Maxx parent TJX Cos and Gap Inc
, to post a 4.3 percent rise in same-store sales for
April, according to Thomson Reuters, better than the 0.8 percent
gain a year earlier.

April sales got a boost from Easter’s timing in late March.
But at the same time, the weather was cool in much of the
country, delaying many shoppers’ purchases of spring clothing.

Janney Capital Markets analyst Adrienne Tennant said in a
note this week that retailers were more aggressive in offering
discounts in April, but things eased at the end of the month,
suggesting stores had not over-ordered, and making it likely
they will avoid panicked markdowns.

Despite what turned out to be strong hiring in April,
consumer morale lagged the news. U.S. consumer sentiment dipped
last month as Americans remained concerned about their
employment and financial prospects, a Thomson Reuters/University
of Michigan survey late in April found.

U.S. employment rose at a faster pace than expected in April
and hiring was much stronger than previously thought in the
prior two months, while the U.S. stock market indices marched to
all-time highs.

Teen retailers The Buckle and Zumiez Inc
each reported much better-than-expected April sales on Thursday.

Last week, drugstore chain Rite Aid Corp reported
same-store sales fell 4 percent in April, largely because of
many lower cost generic drugs coming to market in the last year.
Larger rival Walgreen Co reported a modest 1.2 percent
rise, hurt by a drop in sales of general merchandise.

Other chains expected to report later on Thursday include
TJX, Gap and Ross Stores Inc. As previously announced,
TJX and Ross will no longer report monthly sales after the April
report.

That will leave 11 U.S. chains reporting monthly sales, down
from a peak of 68 in 2006. In the years since, big names such as
Macy’s Inc, Wal-Mart Stores Inc and Best Buy Co
Inc have dropped out of the same-store sales index.

But Wall Street brushed off the news after the company,
which last month brought back ex-CEO Myron Ullman to turn around
its operations, reported cash levels that implied the department
store chain had gone through less money than feared. Vendors and
analysts expect sales to improve later this year.

Shares rose 1.6 percent to $16.66 in after-hours trading.

Penney, coming off a 25 percent sales plunge in 2012 largely
blamed on former CEO Ron Johnson’s strategy of eliminating
coupons and sales in favor of everyday lower prices, reported
that same-store sales, or sales at stores open at least a year,
fell 16.6 percent in the first quarter.

Analysts were expecting a drop of 13.2 percent, according to
Thomson Reuters I/B/E/S.

Johnson was ousted last month and Ullman, whom he replaced
in late 2011, has increased the pace of sales in the last two
weeks and overseen an apologetic ad campaign aimed at winning
back shoppers.

Penney reported quarterly sales of $2.64 billion, below the
$2.74 billion Wall Street was expecting, according to Thomson
Reuters I/B/E/S.

Some of the decline stemmed from a renovation at the home
goods section at 500 of Penney’s larger stores ahead of a
re-opening this spring with brands by designers such as Jonathan
Adler and Martha Stewart.

“This is all on Ron Johnson’s dime,” said Bernard Sosnick of
Gilford Securities Inc about the first quarter results.

Penney will report full quarterly results May 16. Wall
Street is more concerned about whether sales are improving now
that the company has brought back some of its most popular
private brands and old pricing strategy that included coupons
and discounts, said Sosnick.

There is a sense among analysts and Penney vendors that
sales are already improving since Penney brought back private
brands like St. John’s Bay clothing and a more aggressive
promotion and discounting schedule, including using clear
language like “sale” and “25 percent off.”

“I think the direction the company is heading in is one that
has higher probability of succeeding,” Newell Rubbermaid Inc
Chief Executive Mike Polk told Reuters last week. Newell
sells items like Calphalon cookware and Levolor window
treatments at Penney. Newell took a big hit because of Penney’s
sales hemorrhage last year.

PVH Corp Chief Executive Manny Chirico last week
said at an investor conference that he thinks Penney will be
able to win back customers and expects Penney’s same-store sales
to go positive in the second half of the year. The company is a
major supplier of menswear to Penney, including Izod brand.

The company, in providing preliminary, partial results for
the quarter, said it had $821 million in cash on hand as of May
4, which suggested it had gone through $870 million in cash in
the quarter, according to an estimate by Morningstar analyst
Paul Swinand.

In a research note put out on Tuesday before Penney reported
its results, Morgan Stanley analyst Kimberly Greenberger had
estimated Penney had burned through $1.2 billion in cash.

Investors expect to hear more on the earnings call about
whether Ullman will try to preserve cash by not opening more
branded boutiques within Penney stores, a key part of Johnson’s
turnaround plan.

Last week, Penney said it had lined up a five-year, $1.75
billion financing deal with Goldman Sachs, its latest move to
shore up its finances as it looks to stabilize its operations.