J. C. Penney comparable department store sales
increased 12.0% for the four weeks ended November 27, 2004. Sales were positive across all merchandise categories and all regions of the country. Results reflected record sales for the two days following Thanksgiving, driven by strong promotional programs.
Catalog/Internet sales decreased 4.1% with the Internet component increasing over 20%.

As previously noted, this year’s November period includes
Thanksgiving week whereas it was reported in last year’s December
period. This calendar shift benefited department stores and negatively
impacted Catalog/Internet in November. The impact from this shift will
reverse in the December period and therefore, November/December sales,
which are expected to be up low-single digits for both comparable
department stores and Catalog/Internet, should be viewed on a combined

The Company reiterated its previous sales expectations for the
remaining months of the fourth quarter.

The Company reaffirmed its previously announced fourth quarter
earnings guidance of $0.95 to $1.05 per share, including the effects
of approximately $0.08 per share related to one-time charges. However,
fourth quarter earnings are highly dependent upon December results,
which may be impacted by various factors including continued high
energy costs.

                       Preliminary Sales Summary
                            ($ in millions)

                            Period ended            % Increase
                       ---------------------- ---------------------
                        Nov. 27,    Nov. 22,               Comparable
                          2004        2003     All Stores    Stores
                       ----------- ----------  ----------  ----------

4 Weeks
Department stores          $1,543     $1,377       12.1        12.0
Catalog/Internet              284        296       (4.1)
                       ----------- ----------
Total                      $1,827     $1,673        9.2

43 Weeks
Department stores         $12,027    $11,251        6.9         6.9
Catalog/Internet            2,151      2,110        1.9
                       ----------- ----------
Total                     $14,178    $13,361        6.1

Capital Structure Repositioning Update

As of December 1, 2004, the Company had repurchased 32.7 million
shares of its common stock in open market transactions for
approximately $1.2 billion. This represents more than 40 percent of
the total planned share repurchase program. Additionally, the Company
has retired $1.7 billion or more than 70% of the planned debt
restructure program, including a $650 million convertible bond which
was converted into 22.8 million shares of JCPenney common stock on
November 17, 2004.