Penney’s Profit Soars; Dayton, Federated Off

J. C. Penney Co. reported Tuesday that its second-quarter profit shot up 124.2% from the year-ago period, while Dayton-Hudson and Federated Department Stores both reported that their earnings fell during the period.

Penney reported earnings of $103 million.

Chairman William Howell said the company’s store and catalogue divisions continued to do well as Penney concentrates on higher-margin merchandise lines such as clothing and home furnishings.

Dayton-Hudson said it earned $23 million, down 37.3%.

Store Remodelings a Factor

The retailer had increased expenses during the quarter in part because of store expansions. It said its earnings also were affected by higher clearance markdown of merchandise in some divisions, notably California-based Mervyns, and slower sales growth because of store remodelings. The company’s divisions also include Dayton-Hudson, Lechmere and Target.

Federated said its second-quarter earnings fell 12.8% to $30.1 million.

The company, whose holdings include the Ralphs supermarket chain and the Bloomingdale’s, Bullock’s and I. Magnin department store chains, said results were affected by the costs of mergers and consolidations in its Foley’s and Lazarus divisions. During the quarter, Federated acquired 12 Block’s stores from Allied Stores and added them to its Lazarus chain.

Oil Woes Hurt

The stagnant oil economy also had a negative effect on stores in Southwestern markets, Federated said.

The company also had a $14.3-million expense for debt restructuring.

For the first half of the year, Penney reported earnings of $157 million, up 44.4% from the the first half of 1986. The figures include a $140-million charge for the costs of relocating Penney’s corporate headquarters from New York City to the Dallas area.

Dayton Hudson reported earnings of $61.1 million for the first six months, down 18.8%.

Federated said its six-month earnings were down 2.6% to $285.89 million.