J. C. Penney Company reported that comparable department store sales increased 11.4 percent for the five weeks ended April 3, 2004. Sales, which were above expectations, were strong throughout the period and across all merchandise divisions. Sales continue to reflect good sell through of fashion and basic merchandise, with a good response to planned marketing events. Sales during the latter part of March also reflected some early Easter business.

Catalog/Internet sales were also above expectations, increasing 9.7 percent. Sales reflect good results from specialty catalogs and continued strength in Internet. Internet sales increased over 50 percent, reflecting a positive customer response to expanded product offerings, value and convenience.

The Company currently expects April sales for both comparable department stores and catalog/Internet to be up low single digits.

Operating profit through the first nine weeks is tracking above last year's levels, reflecting strong sales combined with positive gross margin trends. As a result, management now expects first quarter earnings in the range of $.20 to $.25 per share compared to the $.05 per share earned in last year's first quarter. 

                      Preliminary Sales Summary
                      -------------------------                       
                           ($ in millions)

                              Period ended      % Increase/(Decrease)
                          --------------------- ----------------------
                           Apr. 3,   Mar. 29,               Comparable
                             2004       2003    All Stores    Stores
                          ---------- ---------- ----------- ----------

5 Weeks
-------------------------
Department stores            $1,292     $1,167        10.7       11.4
Catalog/Internet                261        238         9.7
                          ---------- ----------
Total                        $1,553     $1,405        10.5

9 Weeks
-------------------------
Department stores            $2,301     $2,070        11.2       11.7
Catalog/Internet                449        412         9.0
                          ---------- ----------
Total                        $2,750     $2,482        10.8

Discontinued Operations — Eckerd drugstores comparable store sales decreased 1.8 percent for the five week March period, with pharmacy sales increasing 1.1 percent and front-end sales declining 8.6 percent. Total drugstore sales were flat for the period. For the nine weeks ended April 3, 2004, comparable store sales decreased 2.6 percent and total drugstore sales decreased 1.0 percent.