J. C. Penney total department store sales increased 3.7%, while comparable store sales increased 2.8% for the four weeks ended August 27, 2005. Comparable store sales were in line with previous guidance of a low-single digit increase, and come on top of a 4.1% increase in last year's August period.

The best performing merchandise categories for the month were women's accessories and fine jewelry, home furnishings and family shoes. In addition, back to school categories contributed solid results, representing the fifth consecutive year of positive comparable store sales in this important selling season. From a geographical perspective, sales were strongest in the southeast and western regions of the country.

Direct (catalog/Internet) sales were flat, which was in line with previous guidance, and compared to a 6.0 percent increase in last year's August period. Sales for jcpenney.com increased nearly 30 percent for the month, on top of a 35 percent increase last August.

September Sales Guidance

For the month of September, the company expects comparable department store sales to increase low-single digits compared to an increase of 1.8 percent in the same period last year. Direct (catalog/Internet) sales are expected to be about flat versus a 3.3 percent increase last September, with continued strength coming from jcpenney.com. 

                      Preliminary Sales Summary
                           ($ in millions)

                                          % Increase/(Decrease)
                                   -----------------------------------
                   Period ended       All Stores        Comp Stores
                 ----------------- ----------------- -----------------
                 Aug. 27, Aug. 28, Aug. 27, Aug. 28, Aug. 27, Aug. 28,
                  2005     2004     2005     2004     2005     2004
                 -------- -------- -------- -------- -------- --------

4 Weeks
----------------
Department
 stores           $1,376   $1,327      3.7      4.2      2.8      4.1
Direct               194      194      0.0      6.0
                 -------- --------
Total Company     $1,570   $1,521      3.2      4.4

30 Weeks
----------------
Department
 stores           $8,225   $7,900      4.1      7.2      4.1      7.3
Direct             1,444    1,371      5.3      3.1
                 -------- --------
Total Company     $9,669   $9,271      4.3      6.5

Capital Structure Repositioning Update

The company repurchased approximately 3.5 million shares of common stock during the four weeks ended August 27, 2005, bringing total fiscal 2005 repurchases to approximately 23.7 million shares of common stock for about $1.2 billion. The company has now completed more than 75 percent of the aggregate $4.15 billion share repurchase programs authorized since 2004, and continues to expect to complete the existing programs by the end of fiscal 2005.