J. C. Penney Company, Inc. reported today that comparable department store sales decreased 3.8 percent for the four weeks ended January 25, 2003, compared with last year’s 5.9 percent gain.

January sales were below plan, impacted by lower levels of end of season clearance merchandise resulting from strong December sales. The best performing merchandise categories, with positive sales increases, were Fine Jewelry and Children’s. For the fourth quarter, comparable store sales increased 1.9 percent, and Department Store and Catalog operating profit will improve over last year.

Drugstore sales increased 3.0 percent, and 1.8 percent on a comparable store basis, which was below plan. Comparable store pharmacy sales increased 3.3 percent and front-end sales decreased 1.5 percent. Pharmacy sales were negatively impacted by approximately 500 basis points from the effects of lower priced generic drugs and other changes in branded drugs, and by soft flu sales. The best performing front-end categories were household products, beverages, and over-the-counter products. Eckerd’s full year FIFO operating profit will be better than plan and in the range of 2.8 to 3.0 percent of sales.

Catalog sales decreased 27.8 percent, in line with expectations. E-commerce sales, which are included in catalog, continue to experience strong growth, increasing 21.4 percent in the fourth quarter. For the full year, e-commerce sales were $381 million, a 17.8 percent increase over last year.

Based on the operating performance for all businesses, management believes that earnings per share for the fourth quarter will at least be equal to $0.65 per share, the high end of First Call analysts estimates.

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

                          Period ended       % Increase/(Decrease)
                        ----------------- ----------------------------
                        Jan. 25, Jan. 26,                   Comparable
                          2003     2002      All Stores       Stores
                        -------- -------- ----------------- ----------

4 Weeks
-----------------------
Department stores          $804     $837              (3.9)      (3.8)
Eckerd drugstores         1,118    1,085               3.0        1.8
Catalog                     153      212             (27.8)
                        -------- --------
Total Company            $2,075   $2,134              (2.8)

13 Weeks
-----------------------
Department stores        $4,993   $4,907               1.8        1.9
Eckerd drugstores         3,784    3,662               3.3        2.5
Catalog                     772      973             (20.7)
                        -------- --------
Total Company            $9,549   $9,542               0.1

52 Weeks
-----------------------
Department stores       $15,091  $14,808               1.9        2.6
Eckerd drugstores        14,643   13,847               5.7        5.2
Catalog                   2,613    3,349             (22.0)
                        -------- --------
Total Company           $32,347  $32,004               1.1