J. C. PENNEY COMPANY, INC. REPORTS 2012 SECOND QUARTER RESULTS

PLANO, Texas, Aug. 10, 2012 – J. C. Penney Company, Inc. (NYSE: JCP) today announced financial results for its fiscal second quarter ended July 28, 2012. For the quarter, jcpenney reported an adjusted net loss of $81 million or $0.37 per share, excluding restructuring and management transition charges, inventory transition markdowns, gain on the redemption of the Simon REIT units, net of fees and non-cash qualified pension expense. On a GAAP basis, the Company reported a net loss of $147 million or $0.67 per share. A reconciliation of GAAP to non-GAAP financial measures is included in the schedules accompanying the consolidated financial statements included with this release.

"We have now completed the first six months of our transformation and while business continues to be softer than anticipated, we are confident the transformation of jcpenney is on track. The transition from a highly promotional business model to one based on everyday value will take time and we will stay the course," said jcpenney CEO Ron Johnson. "This month we simplified our pricing, launched the first of our new shops, and accelerated our marketing efforts to focus on brands, products and value. Early response to these efforts has been very encouraging."

He added, "We continue to learn and adjust, and fully expect that our unique, specialty department store experience will drive jcpenney's long term success. Our rock solid balance sheet will support the execution of our transformation and position us for growth beginning in 2013."

Second Quarter Results:
Comparable store sales for the second quarter declined 21.7 percent. Total sales decreased 22.6 percent, which includes the effects of the Company's exit from its outlet business. Internet sales through jcp.com were $220 million in the second quarter, decreasing 32.6 percent from last year. Sales were adversely impacted by the Company's decision to significantly reduce its marketing activities during the latter half of the quarter, as it reconsidered its approach to pricing and marketing in time for back to school.

Gross margin was 33.2 percent of sales, compared to 38.3 percent in the same period last year. Gross margin was impacted by lower than expected sales in the quarter and approximately $102 million of markdowns taken to clear discontinued inventory in preparation for new product arriving in the fall of 2012. Excluding these transitional markdowns, which lowered gross margin by 340 basis points, adjusted gross margin was 36.6 percent of sales. A reconciliation of GAAP gross margin to non-GAAP adjusted gross margin is included in the schedules accompanying this release.

The Company's SG&A expenses decreased $193 million versus last year's second quarter. Based on the pace of its ongoing efforts to aggressively manage expenses and additional operational efficiencies that management has identified, the Company continues to expect savings to accelerate and exceed an annual run rate of approximately $900 million at the end of 2012.

For the second quarter, the Company incurred $159 million in restructuring and management transition charges. These charges comprised the following:

• Home office and store severance expense $56 million, or $0.16 per share;
• Store fixtures $42 million, or $0.12 per share;
• Software and systems $36 million, or $0.10 per share;
• Supply chain $10 million, or $0.03 per share;
• Management transition $10 million, or $0.03 per share;
• Other $5 million, or $0.01 per share.

The Company ended the second quarter with approximately $888 million in cash and cash equivalents on its balance sheet. Cash used in operations in the second quarter was $32 million, $545 million less than the first quarter of 2012.

2012 Outlook:
The Company no longer anticipates achieving the previously issued non-GAAP earnings guidance for fiscal 2012. Management intends to continue to provide qualitative information on business trends and capital expenditures throughout the year. Additionally, the Company expects to end the fiscal year with in excess of $1 billion of cash on the balance sheet after spending $800 million in capital expenditures to support the Company's transformation efforts and paying off $230 million of notes due in August 2012.

Earnings Event Today/Webcast Details:
Additional financial detail relating to the Company's quarterly performance is now available on its investor relations website at ir.jcpenney.com. These slides will also be presented as part of the Company's earnings event. At 8:00 a.m. ET today, the Company will host an in-person meeting with members of the financial community at SIR Stage 37 in New York City where the jcp leadership team will provide further commentary on the Company's second quarter 2012 financial results.

The presentations and question-and-answer session will be available via live streaming video and webcast on the Company's investor relations website at ir.jcpenney.com. A replay of the webcast will be available for up to 90 days after the event.

For individuals without access to the webcast, the event will also be available via live conference call in listen-only mode. To access the presentations and question-and-answer session, please dial (888) 754-4437, or (212) 231-2900 for international callers, and reference the jcp second quarter earnings event. Telephone playback will be available for seven days beginning approximately two hours after the conclusion of the meeting by dialing (800) 633-8284, reservation code 21600421 and (402) 977-9140, reservation code 21600421 for international callers.

For further information, contact:

Eric Cerny and Angelika Torres; (972)431.5500
jcpinvestorrelations@jcpenney.com

Kristin Hays and Joey Thomas; (972)431.3400
jcpcorpcomm@jcpenney.com

Corporate Website
ir.jcpenney.com

About jcpenney:
More than a century ago, James Cash Penney founded his company on the principle of the Golden Rule: treat others the way you'd like to be treated — Fair and Square. His legacy continues to this day, as J. C. Penney Company, Inc. (NYSE: JCP) boldly transforms the retail experience across 1,100 stores and jcp.com to become America's favorite store. Focused on making the customer experience better every day, jcpenney is dreaming up new ways to make customers love shopping again. On every visit, customers will discover great prices every day in a unique Shops environment that features exceptionally curated merchandise, a dynamic presentation and unmatched customer service. For more information, visit us at jcp.com.

This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which reflect the Company's current views of future events and financial performance, involve known and unknown risks and uncertainties that may cause the Company's actual results to be materially different from planned or expected results. Those risks and uncertainties include, but are not limited to, general economic conditions, including inflation, recession, unemployment levels, consumer spending patterns, credit availability and debt levels, changes in store traffic trends, the cost of goods, trade restrictions, the impact of changes designed to transform our business, changes in tariff, freight and shipping rates, changes in the cost of fuel and other energy and transportation costs, increases in wage and benefit costs, competition and retail industry consolidations, interest rate fluctuations, dollar and other currency valuations, the impact of weather conditions, risks associated with war, an act of terrorism or pandemic, a systems failure and/or security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or Company information and legal and regulatory proceedings. Please refer to the Company's most recent Form 10-K and subsequent filings for a further discussion of risks and uncertainties. Investors should take such risks into account when making investment decisions. We do not undertake to update these forward-looking statements as of any future date.

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