Even in a good economy, staying afloat in a competitor-saturated industry takes talent. But with the downturn draining consumers' confidence as if through a sieve, J.C. Penney (NYSE: JCP), with its more than 1,100 department stores, continues to stay above water through conservative business practices and savvy inventory management.

It hasn't been an easy fight, though. Much like Macy's (NYSE: M) experienced in its latest quarter, J.C. Penney's same-store sales fell 9.5% from levels achieved last year, while overall net sales dropped 7.9% to $3.9 billion. The company posted a net loss of just $1 million, giving the company break-even earnings per share -- better than the ($0.01) loss analysts had expected, but still far below what it earned one year ago.

Making do
Although those results may not seem like anything to write home about, J.C. Penney made some notable achievements. It stayed on the ball by keeping inventory in line with sales trends, which allowed it to sell more merchandise at regular price instead of having to sell items on clearance. That resulted in wider gross margins.

Perhaps the most impressive aspect of its quarterly results was the fact that total inventories decreased by nearly 12% year-over-year despite the lower sales. Cash flows were also very strong; the company retired $113 million in debt and paid its dividend as usual. With a reasonable amount of debt on the books, J.C. Penny has an enviable cash position.

Company

Market cap (millions)

Quick Ratio

Debt/Equity

J.C. Penney

7,160

0.83

0.84

Kohl's (NYSE: KSS)

15,798

0.64

0.29

TJX (NYSE: TJX)

14,511

0.37

0.49

Saks (NYSE: SKS)

843

0.03

0.64 Continued...