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NEW YORK (

TheStreet

) -- Department stores overall topped Wall Street's fourth-quarter forecasts. And while most of the companies foresee continued growth throughout 2011, there is looming fear and uncertainty around rising costs.

The sector expects commodity prices, especially cotton, to force some price increases. The big question is, how willing are consumers to accept any increase on ticket prices?

J.C. Penney

J.C. Penney

(JCP) - Get J. C. Penney Company, Inc. Report

is starting to catch up to its peers.

The department store reported fourth-quarter profit and sales that topped estimates and also said that it foresees sales continuing to grow in 2011.

The company also said it plans to buy back $900 million of its shares starting in March.

J.C. Penney earned $271 million, or $1.13 a share, a 35.5% increase from $200 million, or 84 cents, a year earlier. The retailer earned $1.09 from continuing operations, beating analysts' outlook by a penny.

Total sales were up nearly 3% to $5.7 billion, while same-store sales advanced 4.5%. J.C. Penney attributed its sales strength to its exclusive deal with

Liz Claiborne

( LIZ)and Sephora in-store shops.

Looking ahead, J.C. Penney said it foresees same-store sales rising by low-to-mid-single digit percentages in 2011. It also expects comparable sales to rise between 3% and 5% in the first quarter.

Full-year income should fall in the range of $2 and $2.10 a share, while in the current quarter management predicts a profit of 18 cents to 23 cents a share.

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Sears

Sears

(SHLD)

reported a decline in fourth-quarter profit, as comparable sales at its namesake stores tumbled.

In a surprise move, the department store, led by Eddie Lampert, also named a new CEO after a three-year search. The kicker:

the new chief executive, Lou D'Ambrosio, has no retail experience

.

D'Ambrosio was previously head of Avaya, a telecommunications company, and before that spent 16 years at

IBM

(IBM) - Get International Business Machines Corporation Report

.

He succeeds Bruce Johnson, who had been operating as interim CEO since 2008. D'Ambrosio has been working with Sears over the past six months as a consultant to the board of directors on strategic and operational initiatives.

D'Ambrosio has a massive task at hand.

During the latest three-month period, the department store earned $374 million, or $3.43 a share, compared with $430 million, or $3.74 a share, in the year-ago period. Excluding items, Sears actually earned $3.67 a share, ahead of forecasts of $3.57.

Sears hadn't reported a profit since its first quarter.

Sears sales fell nearly 1% to $13.14 billion, but beat analysts' estimates of $12.97 billion. U.S. same-store sales slipped 1.5%, with namesake stores posting a 4.5% decline and the Kmart chain gaining 2.5%.

Kohl's

Kohl's

(KSS) - Get Kohl's Corporation Report

reported better-than-expected fourth-quarter earnings, but its 2011 outlook fell short.

The department store also issued its first-ever quarterly dividend of 25 cents a share and said it will increase its share repurchase program by $2.6 billion to $3.5 billion.

During the quarter, Kohl's earned $493 million, or $1.66 a share, a 14% increase from $431 million, or $1.40 a share, in the year-ago period. Revenue climbed 6% to $6.04 billion, while same-store sales rose 4.3%.

Wall Street was calling for a profit of $1.65 a share on revenue of $6.04 billion.

Looking ahead, Kohl's expects first-quarter profit in the range of 68 cents to 73 cents a share, and full-year earnings between $4.05 and $4.25 a share. Analysts predicted a profit of 71 cents and $4.37 a share, respectively.

Its disappointing outlook was a clear indication that Kohl's is starting to worry about higher commodity costs, particularly for cotton.

"Those increases accelerate dramatically this fall, and costs are expected to be up significantly across all apparel categories, approximately 10%to 15% overall," CEO Kevin Mansell said on a call with analysts.

Saks

Saks

(SKS)

once again proved that the luxury shopper is, once again, spending.

During its fourth-quarter the high-end department store swung to a profit, which is attributed to more full-price selling and fewer discounts.

Saks earned $25 million, or 14 cents a share, compared with a loss of $4.6 million, or 3 cents, in the year-ago period. On an adjusted basis, the company actually earned 13 cents a share, ahead of analysts' estimates of 6 cents.

Revenue grew 7% to $866.3 million, beating Wall Street's forecast of $854.4 million, while same-store sales climbed 8.4%. Gross margin improved to 37.8% from 36.5%.

The company did indicate on a conference call with analysts that it expects some prices to rise in the fall due to inflation, but it will be a result of higher-end fabrics and furs in the stores. "The fashion will in itself dictate higher prices for the fall season," President and Chief Marketing Officer, Ronald Frasch said.

Looking ahead, Saks anticipates same-store sales will rise in the mid-single digits in 2011.

Dillard's

Dillard's

(DDS) - Get Dillard's, Inc. Class A Report

reported a 38% surge in fourth-quarter profit, as sales soared during the holiday season.

For the three-month period, the company earned $109.6 million, or $1.75 a share, compared with $79.5 million, or $1.08, last year. Excluding one-time items, Dillard's actually earned $1.55 a share, easily topping forecasts of $1.38.

Revenue grew 5.4% to $1.98 billion, while same-store sales jumped 7%. Gross margins inched up 0.9%, as inventory levels were down 2% for the period.

Shares of Dillard's have advanced nearly 5% since it released its quarterly results.

Macy's

Macy's

(M) - Get Macy's Inc Report

saw a 50% surge in fourth-quarter profit, but warned that it will raise some prices to offset higher costs.

During the quarter, Macy's earned $667 million, or $1.55 a share, compared with $445 million, or $1.05 a share, in the prior-year period. Excluding a 4 cent charge, the department store actually earned $1.59 a share, ahead of both analysts' and internal forecasts.

Revenue rose 5% to $8.27 billion, just missing Wall Street's estimates of $8.28 billion. Same-store sales increased 4.3%, receiving a 1.1 percentage point boost from online sales, which soared 29%.

Macy's has placed a greater focus on its private-label merchandise, seeing success from the launch of the Material Girl line during the back-to-school season. Private label, exclusive merchandise and limited distribution brands make up about 43% of business.

While Macy's did note that it will raise some prices, Chief Financial Officer Karen Hoguet said during a conference call that it is adding some features to items to justify price increases.

She also added that "a significant portion of our business is in categories that are not impacted by the escalation in raw material prices."

For the full-year, Macy's foresees earnings between $2.25 and $2.30 a share, which assumes a 3% jump in same-store sales. Revenue is expected to grow 3% to $25.8 billion. Analysts expect income of $2.27 a share on revenue of $25.7 billion.

Nordstrom

Nordstrom

(JWN) - Get Nordstrom, Inc. Report

posted a 35% spike in fourth-quarter profit, helped by lower credit card delinquencies and strong holiday sales.

Like Saks, Nordstrom also noted more full-priced selling and fewer promotions.

The high-end retailer also announced it will acquire flash-sale Web site, HauteLook, for $180 million.

During the quarter, Nordstrom earned $232 million, or $1.04 a share, compared with $172 million, or 77 cents, last year. Revenue reached $2.92 billion, a 10% jump from the year prior, while same-store sales surged 6.7%.

Analysts were calling for a profit of 99 cents on revenue of $2.83 billion.

But Nordstrom's full-year forecast failed to impress investors. The company expects earnings in the range of $2.95 to $3.10 a share, while analysts were looking for a profit of $3.04. Nordstrom also predicts comparable sales will rise between 2% and 4% in 2011, but that's below the 8.1% gain it achieved in 2010.

Nordstrom also said this week that it is raising its quarterly dividend to 23 cents a share, a 15% increase from the previous quarter. The dividend will be paid on March 15 to shareholders of record on March 4.

--Written by Jeanine Poggi in New York.

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