J. C. Penney Company, Inc. comparable store sales decreased 0.6% for the four-week period ended July 31, 2010. Coming out of a strong selling month in June, sales continued to be strong during the first week of July with the Fourth of July holiday weekend extending into the July reporting period, though became softer for the balance of the month.


Men’s apparel and women’s accessories were the top performing merchandise divisions during the month, as were sales of “wear now” summer apparel and accessories across most categories. This strength was offset by the Company selling through its clearance inventory at a faster rate, and often at sharper price points, than in the year-ago period. This resulted in lower total clearance sales when compared to last year, but enabled the Company to enter the Back-to-School season with fresh, forward-looking inventory.


The Back-to-School selling season is later this year with customers continuing their pattern of shopping closer to need, especially for traditional Back-to-School items such as jeans and backpacks. Although it is only one week into the Back-to-School shopping season, initial reads on the Company’s new looks and new brands, like Uproar™ and Supergirl™ by Nastia, are positive.


The Company also added 22 new Sephora inside JCPenney beauty boutiques in July bringing the total number of locations to 215, with 16 more planned to open by the end of 2010. These beauty boutiques are exclusive to JCPenney and continue to attract new customers to its stores.


Total Company sales in July decreased 2.8%. Total sales in 2010 have been, and will continue to be, impacted by the Company’s discontinuation of its Big Book catalogs this year. The loss in sales from the discontinuation of the Big Book catalogs impacted sales in July by approximately 200 basis points.


Second Quarter Earnings Outlook


The Company’s guidance for second quarter earnings was to be in the range of 5 cents to 8 cents per share, which includes a previously-announced charge of approximately 5 cents per share for bond premiums incurred in connection with the Company’s debt tender offer completed in May. Management now expects second quarter earnings to be at the lower end of the $5 cents to 8 cents per share range.


 



















































































































































































































































































Preliminary July Sales Summary
($ in millions)
                                 

Total Company Sales


for period ended

% Increase/(Decrease)
Total Sales       Comp Stores
Jul. 31,   Aug. 1,          
  2010   2009 2010   2009   2010   2009  
 
4 Weeks $ 1,161 $ 1,194 (2.8 ) (10.6 ) (0.6 ) (12.3 )
 
13 Weeks $ 3,938 $ 3,943 (0.1 ) (7.9 ) 0.9 (9.5 )
 
26 Weeks $ 7,867 $ 7,827 0.5 (6.9 ) 1.3 (8.5 )