UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the Thirteen Weeks Ended May 2, 1998

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                     For the transition period from      to

                           Commission File No. 1-4844

                               ECKERD CORPORATION
             (Exact name of registrant as specified in its charter)

        DELAWARE                                       51-0378122
 (State of incorporation)                  (I.R.S. Employer Identification No.)

                              8333 Bryan Dairy Road
                              Largo, Florida 33777
              (Address and zip code of principal executive offices)
                                 (813) 395-6000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes  X   No
                                       ---     ---

As of May 31, 1998 the registrant had 100 shares of common stock outstanding.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM  10-Q AND IS  THEREFORE  FILING  THIS  FORM  10-Q  WITH THE  REDUCED
DISCLOSURE FORMAT PROVIDED FOR IN GENERAL INSTRUCTION H TO FORM 10-Q.




                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                       ECKERD CORPORATION AND SUBSIDIARIES
            (A wholly-owned subsidiary of J. C. Penney Company, Inc.)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                                                               Unaudited         Audited
                                                                                                 5/2/98          1/31/98
                                                                                               ---------        ---------
<S>                                                                                           <C>               <C>    
ASSETS
Current assets:
     Cash (including short-term investments of $50,500 and $0)                                $   55,314           24,883
     Receivables                                                                                 126,903          141,954
     Merchandise inventories                                                                   1,269,601        1,290,708
     Prepaid expenses and other current assets                                                     5,007            4,995
                                                                                               ---------        ---------
               Total current assets                                                            1,456,825        1,462,540
                                                                                               ---------        ---------
Property and equipment, at cost                                                                  993,710          951,597
     Less accumulated depreciation                                                               400,760          384,630
                                                                                               ---------        ---------
               Net property and equipment                                                        592,950          566,967
                                                                                               ---------        ---------
Excess of cost over net assets acquired, less
     accumulated amortization                                                                    129,347          123,962
Favorable lease interests, less accumulated amortization                                          76,742           82,918
Deferred income taxes                                                                             34,119           34,119
Due from affiliates                                                                              352,822          292,162
Other assets                                                                                      51,722           57,412
                                                                                               ---------        ---------
                                                                                              $2,694,527        2,620,080
                                                                                               =========        =========         
LIABILITIES AND STOCKHOLDER'S EQUITY 
Current liabilities:
     Bank debit balances                                                                      $   10,058           53,580
     Current installments of long-term debt                                                       16,898           16,898
     Accounts payable                                                                            280,328          393,195
     Accrued expenses                                                                            337,589          367,965
                                                                                               ---------        ---------
               Total current liabilities                                                         644,873          831,638
                                                                                               ---------        ---------
Other noncurrent liabilities                                                                     125,385          141,895
Long-term debt, excluding current installments                                                   222,859          223,931
Intercompany loan payable to J. C. Penney Company, Inc.                                        1,390,000        1,155,000
Stockholder's equity:
     Voting common stock of $.01 par value.
          Authorized 1,000 shares; issued 100                                                          -                -
     Capital in excess of par value                                                              321,254          321,254
     Retained deficit                                                                             (9,844)         (53,638)
                                                                                               ---------        ---------
               Total stockholder's equity                                                        311,410          267,616
                                                                                               ---------        ---------
                                                                                              $2,694,527        2,620,080
                                                                                               =========        =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       2

                       ECKERD CORPORATION AND SUBSIDIARIES
            (A wholly-owned subsidiary of J. C. Penney Company, Inc.)
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                          Thirteen            Twelve
                                                                                         Weeks Ended        Weeks Ended
                                                                                            5/2/98            4/26/97
                                                                                          ---------          ---------
<S>                                                                                      <C>                <C>    

Sales and other operating revenue                                                        $1,736,846          1,381,638
                                                                                          ---------          ---------
Costs and expenses:
     Cost of sales, including store
          occupancy, warehousing and
          delivery expense                                                                1,341,165          1,070,108
     Operating and administrative expenses                                                  302,393            230,099
                                                                                          ---------          ---------
                Earnings before interest expense                                             93,288             81,431
Interest expense:
     Interest expense on intercompany loan with J. C. Penney Company, Inc.                   17,600              7,552
     Interest expense, net                                                                    4,920              4,224
     Amortization of original issue discount
          and deferred debt expenses                                                            131                135
                                                                                          ---------          ---------
               Total interest expense                                                        22,651             11,911
                                                                                          ---------          ---------
               Earnings before income taxes                                                  70,637             69,520
Income tax expense                                                                           26,843             21,267
                                                                                          ---------          ---------
Net earnings                                                                             $   43,794             48,253
                                                                                          =========          =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       3


                       ECKERD CORPORATION AND SUBSIDIARIES
            (A wholly-owned subsidiary of J. C. Penney Company, Inc.)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                       Thirteen Weeks        Twelve Weeks
                                                                                        Ended 5/2/98         Ended 4/26/97
                                                                                         ----------            ----------
<S>                                                                                    <C>                   <C>    

Cash flows from operating activities:
     Net earnings                                                                       $    43,794                48,253
     Adjustments to  reconcile  net  earnings to net cash  provided by operating
           activities:
               Depreciation and amortization                                                 27,958                23,143
               Amortization of original issue discount
                    and deferred debt expenses                                                  131                   135
               Decrease (increase) in receivables, merchandise
                    inventories and prepaid expenses                                         41,785               (27,127)
               Decrease in accounts payable and accrued expenses                           (160,564)              (35,028)
               Increase in due from affiliate                                               (60,661)              (18,000)
                                                                                         ----------            ----------
                        Net cash used in operating activities                              (107,557)               (8,624)
                                                                                         ----------            ----------
Cash flows from investing activities:
     Additions to property, plant and equipment                                             (48,261)              (32,890)
     Sale of property, plant and equipment                                                    2,020                 1,171
     Acquisition of certain drugstore assets                                                (11,617)                 (894)
     Other                                                                                    5,441                (2,433)
                                                                                         ----------            ----------
                        Net cash used in investing activities                               (52,417)              (35,046)
                                                                                         ----------            ----------
Cash flows from financing activities:
     Increase (decrease) in bank debit balances                                             (43,522)               16,267
     Additions to long-term debt                                                                  -                    22
     Reductions of long-term debt                                                            (1,073)              (32,579)
     Net additions under intercompany note to J. C. Penney Company, Inc.                    235,000                45,098
     Redemption of 9.25% Senior Subordinated Notes                                                -                (1,327)
     Other                                                                                        -                     1
                                                                                         ----------            ----------
                        Net cash provided by financing activities                           190,405                27,482
                                                                                         ----------            ----------
Net increase (decrease) in cash and short-term investments                                   30,431               (16,188)
Cash and short-term investments at beginning of period                                       24,883                71,874
                                                                                         ----------            ----------
Cash and short-term investments at end of period                                        $    55,314                55,686
                                                                                         ==========            ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       4



                       ECKERD CORPORATION AND SUBSIDIARIES
            (A wholly-owned subsidiary of J. C. Penney Company, Inc.)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                       (IN THOUSANDS EXCEPT SHARE AMOUNTS)

Note 1.
-------
On November 2, 1996, the predecessor  Eckerd Corporation ("Old Company") entered
into a  definitive  agreement  to be acquired by Omega  Acquisition  Corporation
("Omega"), a wholly-owned subsidiary of J. C. Penney Company, Inc. ("JCPenney").
The aggregate  transaction  value,  including the assumption of Old Company debt
and the cash out of certain outstanding Old Company employee stock options,  was
approximately  $3.3 billion.  The  transaction  was effected  through a two-step
process  consisting  of (i) a cash tender offer at $35.00 per share for 50.1% of
the outstanding common stock of the Old Company, which was completed in December
1996, and (ii) the February 27, 1997 exchange in which Old Company  stockholders
received  0.6604  of a share of  JCPenney  common  stock  for each  share of Old
Company  common  stock.  After  completing  the  acquisition  of Old  Company on
February 27, 1997, Omega changed its name to Eckerd Corporation (the "Company").
References to the Company  regarding time periods prior to February 27, 1997 are
to the Old Company.

Note  2. 
--------
The interim condensed  consolidated  financial  information is unaudited but, in
the opinion of the Company, includes all adjustments,  consisting only of normal
recurring   accruals,   necessary  for  a  fair   presentation.   The  condensed
consolidated  financial  information  should  be read in  conjunction  with  the
audited  consolidated  financial  statements  included in the  Company's  Annual
Report on Form 10-K405 for the 52 weeks ended  January 31, 1998.  The results of
operations of the periods  indicated  should not be  considered  as  necessarily
indicative  of  operations   for  the  full  year.   The  Company  also  manages
approximately  900 drugstores which are indirectly  wholly-owned by JCPenney and
operated  under the  Eckerd  name.  A  management  fee  which is netted  against
operating  and  administrative  expenses  totaling  $8,683  and  $9,025  for the
thirteen  and  twelve  week  periods  ended  May 2,  1998 and  April  26,  1997,
respectively,  have been charged to affiliates. In addition, for the twelve week
period ended April 26, 1997,  $8,975 of certain  business  integration  expenses
were charged to  affiliates.  The results of the managed stores are not included
in the financial results of the Company. Prior to the acquisition, Old Company's
fiscal year ended the Saturday  closest to January  31st each year.  In order to
make its fiscal year end conform to that of  JCPenney,  the Company  changed its
fiscal year end to the last  Saturday in January of each year.  Accordingly,  to
conform to the JCPenney fiscal  calendar,  the first quarter of fiscal year 1997
consisted of twelve weeks ended April 26, 1997.

Note 3.
-------
Substantially all inventories are determined on a last-in, first-out (LIFO) cost
basis. At May 2, 1998 and January 31, 1998,  inventories would have been greater
by approximately $134,600 and $128,900, respectively, if inventories were valued
on a first-in,  first-out (FIFO) cost basis. Since LIFO inventory costs can only
be determined at the end of each fiscal year when inflation  rates and inventory
levels are  finalized,  estimates of LIFO  inventory  costs are used for interim
financial statements. The cost of merchandise sold is calculated on an estimated
basis and adjusted based on inventories taken during the fiscal year.

                                       5



                                        

Item 2.  Management's  Discussion  and  Analysis of Results  of  Operations  and
         Financial Condition.

The  following  narrative  analysis of the  Company's  results of  operations is
presented  pursuant to the reduced  disclosure  format  provided  for in General
Instruction H to Form 10-Q.

                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                           Thirteen Weeks Ended
                                                                        ---------------------------
                                                                          5/2/98           4/26/97
                                                                        ---------         ---------
<S>                                                                    <C>                <C>   

Sales and other operating revenue                                      $1,736,846         1,489,304
Costs of sales                                                          1,341,165         1,154,349
Operating and administrative expenses                                     302,393           248,446
                                                                        ---------         ---------
Operating earnings                                                         93,288            86,509
Total interest expense                                                     22,651            12,919
                                                                        ---------         ---------
Earnings before income taxes                                               70,637            73,590
Income tax expense                                                         26,843            22,073
                                                                        ---------         ---------
Net earnings                                                           $   43,794            51,517
                                                                        =========         =========
</TABLE>

For comparative  purposes only, the above Condensed  Consolidated  Statements of
Earnings  and the  following  analysis  of results of  operations  compares  the
thirteen  weeks ended May 2, 1998 to the thirteen weeks ended April 26, 1997. As
noted  previously,  as a result of the change by the Company of its fiscal year,
Item 1 Financial  Information  for the 1997 first  quarter is presented  for the
twelve weeks ended April 26, 1997.

Sales and  other  operating  revenue  for the  first  quarter  ended May 2, 1998
increased  16.6%  over the 1997  comparable  period  to  $1.737  billion.  Sales
benefited from significant increases in drugstore  prescription sales as well as
from increases in  non-prescription  (front end) sales,  increases from acquired
Virginia  drugstores,  and  increased  sales in relocated  freestanding  stores.
Comparable drugstore sales (stores open one year or more) increased 9.4% for the
thirteen week period compared to an 8.0% increase in the respective 1997 period.
The increases in comparable  drugstore sales were primarily  attributable to the
increase  in  sales  of  prescription  drugs  as  well  as  increased  sales  of
non-prescription items in the health category.

Prescription  sales as a percentage  of drugstore  sales were 59.9%  compared to
57.3% for the comparable  first quarter 1997 period.  The growth in prescription
sales was primarily the result of increased managed care prescription  sales and
prescription  sales  from  the  acquired  Virginia   drugstores.   Managed  care
prescription sales increased to 82.1% of prescription sales compared to 78.3% in
1997.  Managed care payors typically  negotiate lower  prescription  prices than
those on non-managed  care  prescriptions,  resulting in decreasing gross profit
margins on  prescription  sales.  However,  contracts  with  managed care payors
generally increase the volume of prescription sales and gross profit dollars.

                                       6

As a percentage of sales,  cost of sales and related expenses were 77.2% for the
first  quarter  ended May 2,  1998  compared  to 77.5%  for the 1997  comparable
period.  Cost of sales and related  expenses  are  currently  benefiting  from a
slowing  in the  decline  in  prescription  gross  profit  margins  as  well  as
improvement  in front end gross  profit  margins.  The LIFO  charge for the 1998
first  quarter  period was $5.7  million  compared to $5.2  million for the 1997
first quarter.

Operating and administrative expenses for the first quarter, net of $8.7 million
and $9.8 million of  management  fees in 1998 and 1997,  respectively,  and $9.7
million  of  business  integration  costs in 1997  charged to  affiliates,  as a
percentage  of sales was 17.4%  compared to 16.7% in 1997.  The increase for the
first quarter as a percentage of sales resulted  primarily from increased  costs
as a percentage of sales in such expense  categories as information  technology,
year 2000 compliance and advertising expenses.

Total interest  expense for the 1998 first quarter  increased 75.3% over 1997 to
$22.7 million,  including  $17.6 million of interest  expense from  intercompany
loans with  JCPenney.  The increase  was due to higher  average  borrowings  and
higher interest rates in the first quarter compared to 1997.

Operating  earnings for the first quarter  increased 7.8% to $93.3 million.  The
increase  was due to an increase in gross  profit  dollars as a result of higher
sales and other operating revenue, which was partially offset by the increase in
operating and  administrative  expenses.  Earnings before income taxes decreased
4.0% to $70.6  million.  The  decrease  was due  primarily  to the  increase  in
interest expense.

Income tax expense for the 1998 first quarter was $26.8  million (38%)  compared
to $22.1  million  (30%) in 1997.  Income tax expense in both periods  represent
federal and state income taxes. In addition, the 1997 period included the use of
alternative minimum tax credits and other tax credit carryforwards.

               REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Company's  independent  public accountants have made a limited review of the
financial  information furnished herein in accordance with standards established
by the American  Institute  of Certified  Public  Accountants.  The  Independent
Auditors' Review Report is presented on page 8 of this report.

                                       7


                       Independent Auditors' Review Report
                       -----------------------------------

The Board of Directors
Eckerd Corporation:

We have reviewed the condensed  consolidated balance sheet of Eckerd Corporation
and subsidiaries (a wholly-owned subsidiary of J. C. Penney Company, Inc.) as of
May 2, 1998, and the related condensed  consolidated  statements of earnings and
cash flows for the  thirteen  weeks ended May 2, 1998 and the twelve weeks ended
April 26,  1997.  These  condensed  consolidated  financial  statements  are the
responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data, and making  inquiries of persons  responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the condensed consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards, the consolidated balance sheet of Eckerd Corporation and subsidiaries
(a  wholly-owned  subsidiary  of J. C. Penney  Company,  Inc.) as of January 31,
1998, and the related consolidated statements of earnings, stockholders' equity,
and cash flows for the year then ended (not presented herein); and in our report
dated  February  26,  1998,  we  expressed  an  unqualified   opinion  on  those
consolidated financial statements.  In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of January 31, 1998, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.


/s/ KPMG PEAT MARWICK LLP

June 15, 1998

                                       8



                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company has no material legal  proceedings  pending against it.  Information
regarding  certain  legal  proceedings  involving  the  Company  was  previously
reported  in the  Company's  Annual  Report on Form  10-K405 for the fiscal year
ended January 31, 1998.  As reported in that Form 10-K405,  management is of the
opinion that such legal proceedings should not have a material adverse effect on
the Company's consolidated financial position or results of operations.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

    15.1 Letter re unaudited interim financial information.

    27   Financial Data Schedule.

(b) Reports on Form 8-K

    The Company filed a Current Report on Form 8-K dated February 4, 1998 ( Item
    5 - Other Events).

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                       ECKERD CORPORATION
                                                         (Registrant)

June 15,  1998                                        /s/ Samuel G. Wright
                                                      --------------------
                                                        Samuel G. Wright
                                                    Executive Vice President/
                                                     Chief Financial Officer
                                                 (Principal Accounting Officer)

                                       9


                                  Exhibit Index

                               Eckerd Corporation
                                    Form 10-Q


Exhibit No.           Description of Exhibit
-----------           ----------------------

   15.1               Letter re unaudited interim financial information

   27                 Financial Data Schedule

                                       10