JCPenney 2006 Annual Report Download - page 4

page four l J. C. Penney Company, Inc. l Annual Report 2006
GROWTH INITIATIVES: (cont’d)
The combination of a mall and off-mall presence puts us in a strong
competitive position, which is enhanced by having one of the most
popular general merchandise Web sites on the Internet. In short, we are
making it very easy for our customers to shop with us however and
whenever they want.
In 2006, jcp.com’s sales grew 24 percent to approximately $1.3 billion.
Our site is now accessible through our 35,000 sales terminals and is
increasingly the technological architecture for our organization. As we
look ahead, we are focused on further integrating our stores and jcp.com
in order to continually improve the way we serve our customers.
Introduction of a New Brand Positioning for JCPenney: We have
made great strides in developing an emotional connection with our
customers, and now we want to build a more enduring relationship by
making sure our brand differentiates us from our competition while
inspiring our customers. To do this, we recently launched a new brand
positioning for JCPenney, which is designed to show our customers that
we understand what matters to them as they live their lives every day.
Our “Every Day Matters” positioning will be evident in every aspect of our
business, from our approach to merchandising, to our compelling
marketing and advertising, to most importantly an enhanced customer
experience that focuses on treating our customers as friends by moving
from a “transactional” relationship to an “emotional” relationship. Indeed,
our Associates are the force that will bring our “Every Day Matters”
positioning to life at JCPenney. Generating a deeper, more emotionally
driven relationship with customers will fully engage our Associates and
help make our Company the preferred choice for a retail career.
EXCELLENCE IN EXECUTION AND
FINANCIAL PERFORMANCE:
The Company’s 2006 financial results (see highlights on page 20) reflect
our success in executing our 2005-2009 Long-Range Plan strategies.
This progress has enabled us to considerably increase the value we have
delivered to our stockholders and we are delighted to report that the
market capitalization of the Company increased by $5.8 billion in 2006 to
reach $18.9 billion at year end.
Based on the Company’s financial performance in the past year, our Board
has approved a new $400 million stock repurchase program, which is in
addition to the $750 million program we completed in 2006. The Board
also approved a plan to raise the cash dividend payable to stockholders
by 11 percent to $0.80 per share for the coming year, on top of a 44
percent increase in 2006.
Importantly, our long-term credit ratings have been raised to an investment
grade level by all three major rating agencies. We remain focused on
further strengthening our financial profile in 2007 and beyond.
Myron E. (Mike) Ullman, III
Chairman of the Board and Chief Executive Officer
April 2007
Our outstanding performance has put us close to realizing
the financial objectives we set in the Long-Range Plan
launched in 2005. We had expected this to be a five-year
plan, and I am proud that we have achieved so much in just
two years. So while our fundamental strategies have not
changed, we have updated our goals and initiatives. In short,
our new 2007-2011 Long-Range Plan focuses on:
■DEVELOPING A STRONG AND ENDURING
RELATIONSHIP WITH OUR CURRENT AND
NEW CUSTOMERS by understanding their wants
and aspirations, exceeding their expectations every
time they shop with us, and communicating why
we are the best choice.
■INSPIRING OUR CUSTOMERS WITH OUR
MERCHANDISE AND SERVICES by further
improving the relevancy of our offering through
enhanced style, selection, speed-to-market, pricing
strategies, and product flow.
■BEING THE PREFERRED CHOICE FOR A
RETAIL CAREER by offering an exciting work
experience, increasing engagement, recognizing
success, offering competitive benefits, and
developing and retaining the best people in retail.
■ESTABLISHING JCPENNEY AS THE GROWTH
LEADER IN THE RETAIL INDUSTRY by optimizing
growth in our core business as measured in sales,
productivity, profitability, and return on investment.
This is a great time for JCPenney and, on behalf of our
155,000 Associates, Board and management team, I would
like to express our gratitude for your support. We remain
committed to delivering value for our stockholders. Even as
we celebrate our 105th anniversary, we believe the best is yet
to come for JCPenney’s customers, Associates, and
investors, and we look forward to a bright future.
LONG-RANGE PLAN OBJECTIVES
ACHIEVED AHEAD OF SCHEDULE
SETTING HIGHER GOALS: