Plano, Texas-based J.C. Penney earned $25 million, or 11 cents per share, for the quarter that ended May 2. That compares with $120 million, or 54 cents per share, a year earlier.
Penney's sales dropped 6 percent to $3.88 billion from $4.13 billion in the period a year earlier.
The company is making a payment of $81 million toward pension costs each quarter this year, starting with the first quarter.
Analysts polled by Thomson Reuters, who generally exclude one-time items, on average expected the company to earn 10 cents per share on revenue of $3.88 billion. It's not clear exactly how that forecast compares with the company's unadjusted earnings per share.
Sales at stores open at least a year, known as same-store sales, fell 7.5 percent as weakness in its fine jewelry business countered strong sales of women's apparel. Same-store sales is considered a key metric of a retailer's health because it excludes stores that have opened or closed during the year.
Chairman and Chief Executive Myron E. Ullman III cautioned that the company still expects soft consumer spending and mall traffic for the rest of the year.
Ullman, who took the helm in 2004, has planed store expansions and spearheaded initiatives to lure young and trendy customers to its stores, as consumer spending has remained weak. Department stores have been among the retailers hit hardest during the recession as shoppers have focused on necessities, such as groceries. Macy's Inc. reported this week that its first-quarter loss widened, and Nordstrom Inc. posted a 32 percent drop in quarterly profit on Thursday.
J.C. Penney said it will open more Sephora cosmetics counters because their sales are so strong. During the first quarter, Sephora opened counters inside 14 J.C. Penney stores, for a total of 105 at the end of the first quarter. J.C. Penney hopes to host 155 Sephora counters at the end of the year. Sephora is owned by LVMH Moet Hennessy Louis Vuitton.
Meanwhile, J.C. Penney's president and chief merchandising officer, Ken Hicks, said shoppers are still lining up for merchandise from American Living, an exclusive collection introduced last year that is part of an alliance with Polo Ralph Lauren Corp.
"So far in 2009, American Living is ahead of both last year and our plan in sales and gross margin," Hicks said on a conference call with analysts.
