J. C. Penney Company reported that comparable department store sales increased 3.7 % for the four weeks ended July 26, 2003. All merchandise divisions had positive comparable store sales increases, with good sell through on clearance merchandise. The strongest categories were Men's apparel, Home and Family Shoes.

Catalog/Internet increased 10.6 %, well above plan. Print media and Internet sales on a combined basis increased significantly. Internet sales continue to experience strong growth, increasing by more than 60 % for both the month and the quarter.

Total drugstore sales increased 3.4 %. Comparable drugstore sales increased 0.1 % with pharmacy sales increasing 2.9 % and front-end sales decreasing 5.8 %. Pharmacy sales were negatively impacted by approximately 400 basis points from lower priced generic drugs, Claritin's availability as an over-the-counter medication, and concerns about hormone replacement therapy. The best performing front-end categories were seasonal items, food and snacks, and over-the-counter medications offset by significant declines in photo and cigarettes.

For August, the Company continues to expect comparable department store sales to be up low single digits. Catalog/Internet sales are planned to be down mid-single digits, reflecting the elimination of promotions. Comparable Eckerd sales are planned to be essentially flat.

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

                          Period ended       % Increase/(Decrease)
                        ----------------- ----------------------------
                        July 26, July 27,                   Comparable
                          2003     2002      All Stores       Stores
                        -------- -------- ----------------- ----------

4 Weeks
-----------------------
Department stores          $932     $913          2.1            3.7
Eckerd drugstores         1,101    1,064          3.4            0.1
Catalog/Internet            177      160         10.6                
                        -------- --------                            
Total Company            $2,210   $2,137          3.4                
                                                                     
13 Weeks                                                             
-----------------------                                              
Department stores        $3,097   $3,083          0.5            2.1 
Eckerd drugstores         3,655    3,575          2.3           (0.8)
Catalog/Internet            561      540          3.9                
                        -------- --------                            
Total Company            $7,313   $7,198          1.6                
                                                                     
26 Weeks                                                             
-----------------------                                              
Department stores        $6,233   $6,429         (3.0)          (1.6)
Eckerd drugstores         7,425    7,297          1.8           (1.0)
Catalog/Internet          1,148    1,200         (4.3)               
                        -------- --------                            
Total Company           $14,806  $14,926         (0.8)