J.C. Penney prospers as others struggle

? J.C. Penney Co. Inc. continues to sparkle while the competing mid-tier department stores of retailer Saks Inc. are languishing.

J.C. Penney, helped by strong sales of spring merchandise and its robust online business, said Tuesday its first-quarter earnings quadrupled, beating estimates and upgrading its outlook.

But Saks, which is selling its mid-level Proffitt’s and McRae’s department stores, had a lower-than-expected profit for the first quarter as its moderate price department-store business continues to struggle.

Shares of J.C. Penney rose $1.52, or 3.2 percent, to close Tuesday at $49.35 on the New York Stock Exchange.

J.C. Penney’s performance is a bright spot in the otherwise drooping mid-price sector, whose customers have been hit by higher gas prices and a weak job market. The tier has been squeezed by high-end players like Neiman Marcus Group Inc., whose well-heeled customers have been first to benefit from a recovery, and discounters like Target Corp. and Wal-Mart Stores Inc., which offer budget consumers low-price goods.

J.C. Penney’s earnings jumped to $172 million, or 63 cents per share, in the three months ended April 30. That compares with $41 million, or 13 cents per share, in the year-ago period. That beat by 2 cents the average estimate of analysts surveyed by Thomson Financial.

In a conference call with investors, Ken Hicks, president and chief merchandising officer, said that fashion and basic merchandise sold well. The retailer has done well with its own store brands, which will help build customer loyalty.

Hicks formerly lived in Lawrence while working as president of Payless ShoeSource in Topeka.