J. C. Penney Company, Inc. comparable department store sales increased 2.6% for the four weeks ended Dec. 1, 2007, in line with guidance for a low single-digit increase and compared to a 1.4% increase last year. Total department store sales increased 5.8% for the four weeks. For the month, the best performing merchandise categories were children’s and fine jewelry. Geographically, the best performances were in the northeast and central regions of the country.

Internet sales increased 41.2% for the month, on top of a 17.5% increase last year. Total Direct sales increased 17.6% compared with guidance for a mid-single digit increase and a 0.3% decrease last year. Sales in Direct were well above expectations driven by customer response to enhanced promotional programs, with particular strength in gift items, sleepwear and jewelry.

The Company said that customers continue to respond well to “appointment” shopping occasions. This was evident in the positive response to the Company’s expanded assortment of “red box gifts” and seasonal apparel offerings during the post-Thanksgiving weekend, a record sales period for the Company, which offset weakness during other weeks of the month.

Looking ahead, several important selling weeks of the holiday shopping season are still to come in what remains a challenging economic environment. Accordingly, the Company continues to plan its business conservatively, while focusing on reinforcing its position as America’s gift headquarters by providing compelling merchandise and gift assortments supported by an engaging promotional calendar.

Sales Outlook

As noted previously, the calendar shift due to last year’s 53rd week will affect monthly sales patterns, with November benefiting from an extra week of pre-holiday sales and a negative impact on sales in the December and January periods.

* December: Comparable department store sales are expected to decrease mid-single digits for the five-week period ending Jan. 5, and Direct sales are expected to decrease mid-teens.

* Fourth quarter: On a 13-week basis, management continues to expect comparable department store sales to decrease low-single digits for the fourth quarter, and Direct sales are now expected to decrease low- to mid-single digits.