J. C. Penney Comps Jump 11.1% in May

J. C. Penney Company, Inc. department store sales increased 11.2% for the four weeks ended May 27, 2006. On a comparable store basis, sales increased 11.1%, well above guidance for a low single digit sales increase. In the same period last year, comparable store sales increased 2.9%. All merchandise divisions had at least high-single digit sales gains for the period with particularly strong results surrounding Mother’s Day. The best divisional performance came from fine jewelry, women’s accessories, children’s apparel and family shoes. The Company also saw strength in apparel sales, particularly in women’s dresses and casual sportswear categories. Geographically, all regions of the country generated double digit sales gains.

Direct sales increased 1.6% during the period surpassing initial guidance for sales to be about flat. In the same period last year, Direct sales increased 7.8%. Internet sales through jcp.com continue to represent the Company’s fastest growing sales channel, increasing approximately 25% in May, on top of a 35% increase in last year’s period.

For the month of June, management expects both comparable department store and Direct sales to increase slightly, given the strength last year. In last year’s June period, comparable department store and Direct sales increased 7.4% and 9.1%, respectively.

While still early in the quarter, based on sales performance in the May period, management is raising guidance for earnings from continuing operations in the second quarter by $0.02 per share to approximately $0.62 per share, up from previous guidance of approximately $0.60 per share.

                   Preliminary Sales Summary
                           ($ in millions)

                                                     % Increase
                                               -----------------------
                               Period ended    All Stores  Comp Stores
                            ------------------ ----------- -----------
                            May. 27,  May. 28,
                              2006     2005    2006  2005  2006  2005
                            --------- -------- ----- ----- ----- -----
4 Weeks
-------                     
Department stores             $1,187   $1,067  11.2   4.3  11.1   2.9
Direct                           196      193   1.6   7.8
                            --------- --------
Total Company                 $1,383   $1,260   9.8   4.9

17 Weeks
--------
Department stores             $4,722   $4,526   4.3   3.6   3.6   2.8
Direct                           881      852   3.4   6.0
                            --------- --------
Total Company                 $5,603   $5,378   4.2   3.9