UPDATE: jcpenney Unveils Long Term Financial Outlook; In 2012 Plans to Meet or Exceed 2010 Adjusted EPS of $2.16

At the second day of its launch event in New York City this morning, J. C. Penney Company, Inc. JCP revealed financial plans to generate profitable earnings growth and long-term shareholder value as the Company transforms itself into America's favorite store. Following on CEO Ron Johnson's and President Michael Francis' presentation titled "In Praise of Fresh Air," Mike Kramer, the Company's chief operating officer, outlined the Company's financial outlook, including an enhanced profit formula derived from the simplified business model or "blueprint" that Johnson and Francis revealed the day before. The blueprint, which includes jcpenney's new Fair and Square Pricing strategy, unique and exciting monthly promotional calendar, and substantial changes to its merchandise assortment, is designed to allow customers to once again shop on their terms in a completely re-invented store environment. The Company announced it is targeting $900 million in expense cuts to be completed over the first two years of its transformation, ultimately lowering jcpenney's expenses below 30 percent of sales in just two years. Kramer stated he expects to achieve an expense run rate of 27 percent by the end of the transformation in 2015. The savings will come primarily from stores, advertising and the operations in the Company's home office. During his presentation, Mr. Kramer revealed plans to fund the transformation of jcpenney's stores through cash from operations, beginning with $800 million in capital expenditures in fiscal year 2012. The majority of this capital will be spent enhancing jcpenney's store experience and installing the company's new in-store shops. Beginning in August 2012, jcpenney will begin a month-by-month, shop-by-shop strategy to update its stores with new and exciting merchandise and in-store presentations. Two to three shops will be installed each and every month, over the four-year transformational period. Kramer reiterated the expectation that jcpenney's transformation would be complete by the end of 2015. Company leadership expects full year earnings for fiscal year 2012 to meet or exceed 2010 earnings per share of $2.16 on an adjusted basis, or $1.59 on a GAAP reporting basis. The company announced it will no longer provide quarterly sales or earnings guidance, and will no longer report monthly same store sales results. However, Mr. Kramer did reveal plans to host face-to-face question-and-answer sessions in New York with members of the financial community the week following jcpenney's quarterly earnings announcements, starting with the first quarter of 2012. These questions-and-answer sessions will be webcast live and available for replay after the session.