PREVIEW-JC Penney faces growth questions at Wall St meeting

By Nicole Maestri

NEW YORK, April 14 (Reuters) - At its analyst meeting last year, J.C. Penney Co Inc (JCP.N: Quote, Profile, Research) outlined an aggressive growth plan that included opening 250 new stores over the next five years.

But when the mid-tier department store operator meets with Wall Street analysts this Tuesday and Wednesday, it is expected to take a more cautious tone, as the last 12 months have not been kind to the retailer.

Penney's middle-income consumers have been hit hard by the weakening U.S. economy. More consumers' paychecks are going toward paying for necessities like food and fuel at the same time as their home values are declining and their access to credit has diminished.

Worried that their financial situation will worsen amid talk of a recession, Penney's shoppers have reined in discretionary spending. Last month, Penney warned that its first-quarter profit could be as much as 38 percent below its initial forecast.

Its shares, which closed at $38.45 on Friday, are now trading more than 50 percent below where they were a year ago, and analysts expect the retailer may use its analyst meeting to temper its timeline for achieving the growth targets it outlined last year.

"We believe it is likely that executives will maintain prior financial targets, but move them out given near-term macro uncertainty," wrote Goldman Sachs analyst Adrianne Shapira in a research note.

NAVIGATING GROWTH

At last year's analyst meeting, Penney said that as part of a 2007-2011 growth plan, it would open 250 new stores over the next five years, including its first-ever store in New York City's Midtown Manhattan.