J. C. Penney Company, Inc. comparable department store sales increased 2.5% for the four weeks ended January 28, 2006, while total department store sales increased 2.9%. Comparable store sales were in line with previous guidance for a low-single digit increase, and compare with a sales increase of 2.5% in last year's January period.

Sales were positive across all regions of the country and all merchandise divisions, with the strongest performance in children's apparel, family shoes, women's accessories, and fine jewelry. Sales strengthened throughout the month, with a positive initial response to spring apparel and seasonal products.
Direct (catalog/Internet) sales increased 4.3% during the period, compared to previous guidance for flat sales. The sales increase comes on top of a 12.6% increase in the January period last year. Sales through jcpenney.com were up low double digits in January and nearly 28% for the fiscal year, and as previously announced, exceeded $1 billion in annual sales.

For the month of February, the company expects both comparable department stores sales and Direct sales to be flat to up slightly. In last year's February period, comparable department store sales increased 5.9% and Direct sales increased 6.4%.

                      Preliminary Sales Summary
                           ($ in millions)

                                               % Increase
                                   -----------------------------------
                   Period ended       All Stores        Comp Stores
                 ----------------- ----------------- -----------------
                 Jan. 28, Jan. 29, Jan. 28, Jan. 29, Jan. 28, Jan. 29,
                  2006    2005(1)   2006     2005    2006(1)    2005
                 -------- -------- -------- -------- -------- --------
4 Weeks
-------
Department
 stores             $898     $873      2.9      2.4      2.5      2.5
Direct               196      188      4.3     12.6
                 -------- --------
Total Company     $1,094   $1,061      3.1      4.2

13 Weeks
--------
Department
 stores           $5,299   $5,083      4.2      2.5      2.6      2.8
Direct               904      872      3.7      3.9
                 -------- --------
Total Company     $6,203   $5,955      4.2      2.7

52 Weeks
--------
Department
 stores          $15,943  $15,357      3.8      4.7      2.9      4.9
Direct             2,838    2,739      3.6      3.3
                 -------- --------
Total Company    $18,781  $18,096      3.8      4.5

While the company has not finalized earnings for the quarter, management currently expects operating profit for the fourth quarter to increase to approximately 10.3 percent of sales. In addition, management expects reported earnings will be positively impacted by two one-time items related to income taxes. The first item, attributable principally to certain state tax valuation allowance adjustments, is expected to benefit income from continuing operations by about $0.20 per share. The second item, principally related to the resolution of tax issues involving the Eckerd Drugstore operation, which the company sold in 2004, is expected to benefit discontinued operations by about $0.40 per share.