J. C. Penney Company, Inc. total department store sales decreased 2.7% for the four weeks ended May 5, 2007. Comparable department store sales decreased 4.7%, compared to initial guidance for sales to be flat and a 2.6% increase last year.

Sales for both March and April were distorted by the shift of Easter into this year's March period, as well as shifts in the fiscal calendar due to last year's 53rd week. Combining March and April, total department store sales increased 5.6 percent and comparable store sales increased 3.3 percent for the nine weeks ended May 5, 2007. The best performing merchandise categories for the March/April period were in apparel where men's, women's and children's all experienced solid gains, while bigger ticket home categories continued to be soft. Sales results for the Company's new merchandise launches, most notably Ambrielle, Liz & Co., CONCEPTS by Claiborne, as well as the Sephora concept, continue to exceed expectations. Geographically, the best performing regions of the country were the northwest and southwest, followed by the northeast.

Internet sales through www.jcp.com increased approximately 15 percent for the month, on top of an increase of about 17 percent last year. Total Direct sales decreased 8.0 percent in the April period, compared to initial guidance for sales to be flat and a 1.5 percent increase last year. Sales in Direct continue to be impacted by softness in home categories, which represent a majority of the Direct channel's volume.

Outlook

Management is reaffirming its most recent guidance for first quarter earnings, which will be reported on May 17th. In addition, sales guidance for the four-week May period is for comparable store sales to be flat and Direct sales to decline mid-single digits.

In last year's May period, comparable department store sales increased 11.1 percent, representing the strongest monthly increase in 2006. May sales guidance compares the four weeks ending June 2, 2007, with the four weeks ended May 27, 2006, and includes the calendar shift which moves Memorial Day into this year's May period. Direct sales are expected to decline due to continued softness in home categories, coupled with softness in the Spring/Summer Big Book, and compare to a 1.6 percent increase last year.

                 Preliminary April Sales Summary
                           ($ in millions)

                                               % Increase/(Decrease)
                                              ------------------------
                         Period ended          All Stores  Comp Stores
                  --------------------------  ------------ -----------


                  May 5, 2007  Apr. 29, 2006  2007   2006  2007  2006
                  -----------  -------------  ----- ------ ----- -----
4 Weeks
-----------------
Department stores     $1,136         $1,168   (2.7)   3.2  (4.7)  2.6
Direct                   185            201   (8.0)   1.5
                  -----------  -------------
Total Company         $1,321         $1,369   (3.5)   2.9

13 Weeks
-----------------
Department stores     $3,690         $3,535    4.4    2.2   2.2   1.3
Direct                   660            685   (3.6)   3.9
                  -----------  -------------
Total Company         $4,350         $4,220    3.1    2.5