J.C. Penney, symbol JCP on New York, operates 1,100 department stores in the U.S. and Puerto Rico. It also sells its goods over the Internet.

In its 2010 fiscal year, which ended January 29, 2011, the U.S. stock pick’s sales rose 1.2%, to $17.8 billion from $17.6 billion in 2009. Its same-store sales increased 2.5%. The company launched a number of new brands in 2010. As well, online sales rose 4.4%, to $1.5 billion from $1.3 billion.

The stock pick’s earnings per share jumped 48.6%, to $1.59 from $1.07 in 2009. Penney is doing a good job of managing its inventories. That cuts the need for costly clearance sales. It is also renovating about a third of its stores, including building more in-store boutiques devoted to specific brands.

For example, Penney stores with boutiques that sell Sephora beauty and fragrance products tend to have higher sales than the company’s regular stores. The company now has 231 such stores, with another 76 planned for 2011.

The shares fell from $87 in 2007 to $14 in March 2009. They have rebounded lately, in part because of share purchases by two investors. Combined, these shareholders own 26% of Penney. That prompted it to adopt a shareholder-rights plan.

This plan lets existing shareholders buy new shares at half the market price if a single investor acquires more than 10% of the company without the approval of Penney’s directors. The plan expires in mid-2011.

J.C. Penney holds cash of $2.6 billion. It has long-term debt of $3.1 billion.

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