J. C. Penney Company, Inc. total department store sales increased 10.2% for the five weeks ended Sept. 30, 2006, and comparable store sales increased 8.7%, well ahead of initial guidance for the month.

In last year’s September period, comparable store sales increased 1.4 percent. Sales were strong across all apparel and accessory categories, with the best divisional performances in fine jewelry, children’s and men’s. Geographically, all regions had comparative store sales gains, with the best results in the northeast and central regions.

Direct sales in total increased 11.8 percent for the period, also well ahead of initial guidance. In the same period last year, Direct sales increased 0.4 percent. Internet sales through www.jcp.com continue to represent the Company’s fastest growing sales channel, increasing approximately 36 percent in September on top of a 30 percent increase last year.

As noted previously, management believes it is prudent to take a cautious view of the consumer environment, as evidenced by continuing softness in big ticket home categories. Accordingly, management expects both comparable department store and Direct sales to increase low single digits in the four week October period. In last year’s October period, comparable department store sales increased 2.4 percent and Direct sales declined 2.9 percent.

This week, the Company is opening 20 new stores in markets throughout the United States, with the majority of the stores built in the successful new off-mall format. This represents a first step in the acceleration of the Company’s store opening program. In total, the Company will open 28 new stores in 2006, and has announced plans to open an additional 150 new and relocated stores in the 2007 to 2009 time period.

As a result of sales and profit trends through the first nine weeks of the quarter exceeding initial expectations, management is raising third quarter guidance for earnings from continuing operations to $1.11 per share, an increase of $0.04 per share from previous guidance. Incorporating the current increase, full year earnings from continuing operations are now expected to be approximately $4.61 per share compared to previous guidance of $4.57 per share.