Penney Rolls Toward Big Apple

The retailer also boosts guidance and says it plans to increase store openings.
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Updated from 12:28 p.m. EDT

J.C. Penney

(JCP) - Get Report

, seeking to become the "growth leader in the retail industry," plans to increase its store openings and bring its first store to the shopping mecca of midtown Manhattan.

The Plano, Texas-based department store operator also boosted its earnings forecast in conjunction with an analyst meeting Wednesday. J.C. Penney expects to earn $1.02 a share for the quarter ending this month, in line with the Thomson Financial analyst consensus estimate and up from management's previous 99-cent forecast.

"We have tremendous confidence in our management team and 155,000 engaged Associates across the country to achieve our vision to be the preferred shopping choice for Middle America," Myron Ullman, chairman and CEO, said in a statement.

Penney said it will boost its five-year store-opening plan to 250 locations from 150, renovate an added 300 stores and open a store in

Vornado's

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renovated Manhattan Mall at Sixth Avenue and 33rd Street.

The Manhattan Mall is a block away from

Federated Department Stores'

(FD)

flagship Macy's store at Herald Square. The mall site was once the home to Macy's rival Gimbels, which closed in 1986.

The company is aiming for operating income of 12% to 12.5% of sales by 2011. Same-store sales, or sales at stores open at least a year, are projected to increase low-to-mid single digits over the next five years.

Penney said it expects total department store sales to increase in the mid-to-high single digits annually and direct sales to climb in the mid-single digits.

Penney also expects a 16% compound annual growth rate in earnings per share for 2008 to 2011. The retailer said it plans capital expenditures of $1.28 billion a year for the same period.

Shares were down 92 cents, or 1.1%, to $80.90 in recent trading.