J.C. Penney Co. is having the year it predicted as middle-income consumers struggle with higher energy and food prices.

While first-quarter profit fell 50 percent, customers are still buying shoes and clothing, especially women's, but not as much fine jewelry or home items.

The Plano-based department store chain forecast another 50 percent decline in profit, for the second quarter, which is slightly better than analysts' estimates.

The economic stimulus package is positive for its customers, but the benefits will be modest and short-lived, chairman and chief executive Myron "Mike" Ullman said. First-quarter total sales fell 5 percent to $4.13 billion, and comparable sales decreased 7.4 percent.

Discounts cut profit, and Penney is responding by reducing orders to keep inventory under control.

Penney reported net income of $120 million, or 54 cents a share, in the quarter ended May 3, compared with net income of $238 million, or $1.04 a share, a year ago. Analysts surveyed by Thomson Reuters expected earnings of 49 cents on revenue of $4.17 billion.

Department store chains have had a tougher time than discounters in the current environment. Kohl's Corp. said profit fell more than 25 percent, and Nordstrom Inc.'s profit declined 24 percent. Macy's Inc. swung to a loss of $59 million from a profit of $36 million last year and complained that women's apparel was weak.

That's not true at Penney, Mr. Ullman said, calling women's apparel one of the strongest categories and saying that it's "beating plan and exceeding last year."

Overall, business will remain difficult for the rest of 2008, Penney said. It forecast a second-quarter comparable sales decline in the midsingle digits and earnings of 38 cents a share. That compares with 78 cents last year and is a penny above the consensus estimate from Thomson Reuters for 37 cents.

Penney stock gained $2.07, to close Thursday at $46.32.