Earnings Surge at Penney, Wal-Mart

Two of the nation’s leading retailers, J. C. Penney and Wal-Mart Stores, reported sharply higher third-quarter earnings Tuesday.

Penney, the nation’s third-largest retailer, reported a 24.7% rise in its third-quarter profit, while No. 5 Wal-Mart posted a 36% increase in net income.

Penney said its net income in the three months ended Oct. 25 was $116 million, compared to a year-earlier profit of $93 million.

Sales for the period rose to about $3.5 billion from $3.2 billion.

William R. Howell, Penney’s chairman, credited the growth partly to better control of expenses, including a debt restructuring that lowered interest costs. He said gross profit margins improved in the company’s retail operations as a result of lower markdowns and strong sales in both its stores and catalogue divisions.

Profit from retail operations rose to $109 million during the quarter from $95 million in the third quarter of 1985, the company said.

Earnings of unconsolidated subsidiaries, including Penney’s insurance operations, improved largely because of “favorable underwriting experience,” the company said.

Wal-Mart, based in Bentonville, Ark., said third-quarter sales surged 41% to $2.95 billion from $2.09 billion. Net income rose to $96.5 million from $70.9 million.

Wal-Mart continued the strong pace of store openings that has catapulted it near the top of the list of the nation’s retailers.