J. C. Penney — Investor Day (April 2007)
19 slides from J. C. Penney's investor day presentation, Apr 18, 2007
Slide 1: 2007 Analyst Meeting
2007 Analyst Meeting Exhibit 99.1
Slide 2: Bob Cavanaugh, Financial Growth Leadership
Bob Cavanaugh Executive Vice President Chief Financial Officer Financial Growth Leadership
Slide 3: Overview
Overview • 2006 accomplishments • Leadership strategies and initiatives • Long range financial targets • Value delivery to investors • Growth initiatives • Operating fundamentals
Slide 4: Accomplishments
Accomplishments • Financial position “inflection point” • Strong operating results • Value delivery to investors • Key financial metrics aligned • $750M stock repurchase • 44% dividend increase • Credit rating upgrades • Capital markets recognition
Slide 5: Financial Growth Leadership
Financial Growth Leadership • Financial strategy • Enhance shareholder value • Strengthen financial position • Improve credit profile • New Financial Model • Increased financial flexibility • Reinvest in business • Accelerate growth
Slide 6: Financial Strategy "Brand"
Financial Strategy “Brand” Positioning Financial Strength Shareholder Value Best Better Good Good Better Best GOAL
Slide 7: Plan Alignment Triangle
Essentials Customer Value Proposition Core Capital Fashion EPS Growth Plan Alignment Triangle
Slide 8: Plan Alignment Targets
$6,300 x 16% $1,000 $4.40 $5.44 $10 Plan Alignment Targets Capital 2008 – 2011 ($mm) Cost of Capital Net Income by 2011 ($mm) Average Shares EPS by 2011 2007 EPS Guidance 2011 EPS ÷ 2008 to 2011 EPS CAGR (4 Years) = 16% +
Slide 9: Growth Drivers
Growth Drivers • Brand positioning • Merchandise • Lifestyle focus • Private brand growth • New brands and concepts • Internet • Stores • 50 new stores per year • Improve sales productivity • Inventory flow
Slide 10: Long-Range Sales Targets
2008 - Long-Range Sales Targets mid singles mid to high singles low to mid singles low singles mid singles low singles Direct Dept. Stores Comps Total Co. 8% mid singles
Slide 11: Operating Targets
2011E Operating Targets 12.0% - 12.5% 40% 28% 10.3% modest impr. modest impr. 9.7% 39.3% 29.6% Operating Income Gross Margin Total Operating Expenses
Slide 12: Capital Expenditures 2008-2011
New Stores Existing Stores Technology Other Total 1,200 Capital Expenditures 2008-2011 1,275 Annual Estimates GSF Increase 1% 3% 3% ($ in millions)
Slide 13: Financial Targets
Financial Targets 0.6 10.5 > 26 ROE % 28.3 Fixed Charge Coverage (x) Leverage Ratio (x) ROIC % 17.4 1.5 6.9 28.9 18.0 1.3 7.4 2007E 2011E > 20
Slide 14: Cash Flow Targets 2008-2011
(0.8) (0.8) (0.3) Activity Operating Investing Financing Net (1.2) (1.0) (0.6) Cash Flow Targets 2008-2011 (5.1) (3.1) (0.6) 2007E Cash Balance 2.7 2.1 1.5 ($ in billions) 1.3 1.6 7.6
Slide 15: "Next $75" per share
“Next $75” per share Shareholder Value “ Brand ” Positioning Economic Value ROIC – “C of C” Sustainable EPS Growth Growth Leadership Fwd. P/E > 16 Fwd. PEG > 1.0 Best Best
Slide 16: Raising the Bar
Raising the Bar Blueprint for a Growth LEADER L everage JCP Brand with Customers E xecute 2007-2011 Long-Range Plan A ssociate Engagement D eliver Consistently E PS Growth Target R e - Invent for Future Growth
Slide 17: Financial Flexibility, Growth Acceleration, Consistent Execution, 16% EPS Growth
Financial Flexibility Growth Acceleration Consistent Execution 16% EPS Growth Value Delivery EPS Growth Drivers
Slide 18: Annual Report
Annual Report
Slide 19: is iM iT a
is iM iT a CPenney Every Day Matters’ mm jcp.com SS