<PAGE>




                          SECURITIES AND EXCHANGE COMMISSION
                                  Washington, D. C.
                                        20549

                                  _______________

                                      FORM 10-Q

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

                                  _______________

     For the 13 and 26 week periods               Commission file number 1-777
     ended July 31, 1999

                                J. C. PENNEY COMPANY, INC.
     ___________________________________________________________________________
                   (Exact name of registrant as specified in its charter)

                    Delaware                                     13-5583779
     ___________________________________________________________________________
          (State or other jurisdiction of                    (I.R.S. Employer
           incorporation or organization)                   Identification No.)

     6501 Legacy Drive, Plano, Texas                              75024 - 3698
     ___________________________________________________________________________
     (Address of principal executive offices)                     (Zip Code)

     Registrant's telephone number, including area code         (972) 431-1000
                                                        ________________________


                             ___________________

     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        .
          _______           _______

     Indicate the number of shares outstanding of each of the issuer's classes
     of common stock, as of the latest practicable date.

     260,226,967 shares of Common Stock of 50c par value, as of July 31, 1999.

                                         -1-
<PAGE>

     PART I - FINANCIAL INFORMATION

     ITEM 1 - FINANCIAL STATEMENTS.

     The following interim 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.  Certain
     amounts have been reclassified to conform with the current period
     presentation.  The financial information should be read in conjunction
     with the audited consolidated financial statements included in the
     Company's Annual Report on Form 10-K for the 52 weeks ended
     January 30, 1999.


     Statements of Income
     (Amounts in millions except per share data)
                                        13 weeks ended        26 weeks ended
                                   ____________________  ____________________
                                    July 31,     Aug. 1,   July 31,    Aug. 1,
                                     1999         1998      1999        1998
                                     ____         ____      ____        ____

     Retail sales                   $ 7,033      $ 6,510   $14,328     $13,316
     Direct Marketing revenue           276          251       550         497
                                   ________      _______   _______     _______
     Total revenue                    7,309        6,761    14,878      13,813
                                   ________      _______   _______     _______

     Costs and expenses
       Cost of goods sold,
         occupancy, buying,
         and warehousing costs        5,277        4,881    10,606       9,783
       Selling, general, and
         administrative expenses      1,660        1,507     3,330       3,058
       Costs and expenses of Direct
         Marketing operations           216          191       436         384
       Real estate and other            (11)           4       (20)         (2)
       Net interest expense and credit
         operations (1)                  82          115       137         208

       Acquisition amortization          25           18        62          53
                                    _______      _______   _______     _______

     Total costs and expenses         7,249        6,716    14,551      13,484
                                    _______      _______   _______     _______
     Income before income taxes          60           45       327         329
     Income taxes                        21           18       121         128
                                    _______      _______   _______     _______

     Net income                     $    39      $    27   $   206      $  201
                                    =======      =======   =======     =======


     Earnings per common share:

     Net income                     $    39      $    27   $   206      $  201
     Less: preferred stock dividends     (9)          (8)      (18)        (18)
                                    _______      _______   _______     _______
     Earnings for Basic EPS              30           19       188         183
     Dilutive stock options and
       convertible preferred stock       --           --        --          17
                                    _______      _______   _______     _______
     Earnings for Diluted EPS       $    30     $     19   $   188      $  200

     Shares
     Average shares outstanding (used
       for Basic EPS)                   260          254       258         253
     Dilutive common stock
       equivalents                       --           --        --          19
                                   ________      _______   _______     _______

     Average diluted
       shares outstanding               260          254       258         272

     Earnings per share
     Basic                          $  0.12      $  0.08   $  0.73      $ 0.73
     Diluted                           0.12         0.08      0.73        0.72

     (1) Net interest expense and credit operations  for the 26 weeks ended July
     31, 1999 includes a $5 million pre-tax gain, or 1 cent per share after tax,
     on  the early  extinguishment  of 9.25  percent  Notes due  2004  of Eckerd
     Corporation.

<PAGE>
                                         -2-

     Balance Sheets
     (Amounts in millions)


                                                 July 31,    Aug. 1,   Jan.30,
                                                   1999       1998      1999
                                                 ________   ________  ________
     ASSETS

     Current assets

       Cash and short-term investments
         of $377, $139, and $95                  $    377   $    139   $    96

       Retained interest in JCP Master
          Credit Card Trust                           325        959       415

       Receivables, net                             4,186      3,358     4,415

       Merchandise inventories                      6,279      6,244     6,031

       Prepaid expenses                               139        138       168
                                                 ________   ________  ________

          Total current assets                     11,306     10,838    11,125

     Properties, net of accumulated
          depreciation of $3,013, $3,161,
          and $2,875                                5,459      5,301     5,458

     Investments, prinicipally held by
          Direct Marketing                          1,880      1,847     1,961

     Deferred policy acquisition costs                894        788       847

     Goodwill and other intangible assets
           net of accumulated amortization
           of $287, $165, and $225                  3,211      2,899     2,950

     Other assets                                   1,310      1,259     1,297
                                                 ________   ________  ________

                                                 $ 24,060   $ 22,932   $23,638
                                                 ========   ========  ========

<PAGE>
                                         -3-
     Balance Sheets
     (Amounts in millions)


                                                 July 31,    Aug. 1,   Jan.30,
                                                  1999        1998      1999
                                                 ________   ________  ________
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities
       Accounts payable and accrued expenses     $  3,367   $  3,318   $ 3,465
       Short-term debt                              2,533      1,563     1,924
       Current maturities of long-term debt           325        625       438
       Deferred taxes                                 156        124       143
                                                 ________    _______  ________

         Total current liabilities                  6,381      5,630     5,970

     Long-term debt                                 6,817      6,755     7,143

     Deferred taxes                                 1,551      1,355     1,517

     Insurance policy and claims reserves             973        909       946

     Other liabilities                                930        912       893
                                                 ________   ________  ________

         Total liabilities                         16,652     15,561    16,469

     Stockholders' equity
     Capital Stock
       Preferred stock, without par value:
         Authorized, 25 million shares -
         issued and outstanding, 0.8 million
         shares for all periods presented of
         Series B ESOP convertible preferred          457        493       475
       Common stock, par value 50c:
         Authorized, 1,250 million shares -
         issued and outstanding, 260,
         254, and 250 million shares                3,232      2,867     2,850
                                                 ________   ________  ________
       Total capital stock                          3,689      3,360     3,325
                                                 ________   ________  ________

       Reinvested earnings
         At beginning of year                       3,858      4,066     4,066
         Net income                                   206        201       594
         Common stock dividends declared             (284)      (275)     (549)
         Preferred stock dividends
           declared, net of tax                       (18)       (19)      (39)
         Common stock retired                          --         --      (214)
                                                 ________   ________  ________

       Reinvested earnings at end of period         3,762      3,973     3,858

       Accumulated other comprehensive income/(loss)  (43)        38       (14)
                                                 ________   ________  ________
         Total stockholders' equity                 7,408      7,371     7,169
                                                 ________   ________  ________

                                                  $24,060   $22,932    $23,638
                                                  =======   =======    =======



     The accumulated balances for net unrealized changes in debt and equity
     securities were $25, $66, and $65, and for currency translation
     adjustments were ($68), ($28), and ($79) as of the respective dates
     shown. Net unrealized changes in investment securities are shown net of
     deferred taxes of $15, $39, and $36, respectively. A deferred tax asset
     has not been established for currency translation adjustments.

<PAGE>
                                         -4-

     Statements of Cash Flows
     (Amounts in millions)

                                                        26 weeks ended
                                              _______________________________
                                               July 31,               Aug.1,
                                                1999                   1998
                                              _________            _________

     Operating activities

     Net income                               $     206             $    201
     Depreciation and amortization,
       including intangible assets                  351                  314
     Deferred taxes                                  43                   38
     Change in cash from:
       Customer receivables                         446                  655
       Other receivables                           (127)                 (80)
       Inventories, net of trade payables          (176)                (159)
       Current taxes payable                        (71)                (181)
       Other assets and liabilities, net             40                 (418)
                                              _________            _________
                                                    712                  370
                                              _________            _________

     Investing activities

     Capital expenditures                          (290)                (312)
     Purchases of investment securities            (539)                (279)
     Proceeds from sales of investment securities   554                  201
     Proceeds from the sale of bank receivables      22                   --
                                              _________            _________
                                                   (253)                (390)
                                              _________            _________


     Financing activities

     Change in short-term debt                      553                  146
     Payments of long-term debt                    (440)                 (50)
     Common stock issued, net                         9                   67
     Dividends paid, preferred and common          (300)                (291)
                                              _________            _________
                                                   (178)                (128)
                                              _________            _________

     Net increase/(decrease) in cash and
       short-term investments                       281                 (148)

     Cash and short-term investments at
       beginning of year                             96                  287
                                              _________            _________

     Cash and short-term investments at
       end of second quarter                  $     377             $    139
                                              =========            =========

     Non-cash transactions: On  March 1, 1999, the Company  issued 9.6 million
     shares  of common  stock to  complete  the acquisition  of Genovese Drug
     Stores, Inc. The  total value of the transaction,  including debt assumed
     and  conversion of  options  for  Genovese common  stock  to options for
     JCPenney common stock, was $414 million.

<PAGE>
                                         -5-

      Notes to Interim Financial Information

      1. Reserves and Other Charges

      During  1996 and  1997, the  Company  recorded other  charges principally
      related  to  drugstore  integration   activities,  department  store and
      drugstore  closings and  FAS 121  impairments, and  early retirement and
      reduction  in force  programs  (collectively  other  charges,  net). The
      following tables provide a roll forward of reserves that were established
      for certain categories of these  charges. These reserves are reviewed for
      adequacy on  a periodic basis  and are adjusted  as appropriate based on
      those reviews.  Except as  indicated  below, no  adjustments were deemed
      necessary in the second quarter of  1999. The  following  schedules,  and
      the  accompanying  discussion, provide  the status  of the reserves as of
      July 31, 1999.


      1996 Charges:
      ____________
                               1997              1998          2nd Qtr 1999 YTD
                                         __________________  __________________
                              Y/E        Cash      Y/E          Cash    Ending
      ($ in millions)         Reserve    Outlays   Reserve      Outlays Reserve
                              _______    __________________  __________________

      Eckerd drugstores
      _________________
        Future lease
          obligations (1)       $  66    $  (7)    $  59        $   (2)   $ 57
        Allowance for notes
          receivable (2)           25       --        25            --      25
        Other (1)                   4       --         4            --       4
                                ___________________________    _______________
      Total                     $  95    $  (7)    $  88        $   (2)   $ 86
                                ___________________________    _______________


      Amounts are reflected on the consolidated balance sheets as follows:

      1) Reserve balances are included  as a component of accounts payable and
      accrued expenses.

      2) The  allowance  for  notes  receivable,  which  was  established in
      connection with the drugstore divestiture discussed below, is included as
      a reduction of other assets.


      Future  lease obligations  -  In  1996  the  Company  identified certain
      _________________________
      drugstores that  would be  closed in connection  with its acquisition of
      Eckerd Corporation,  and established a  reserve for the present value of
      future  lease obligations  for  the closed  drugstores.  Costs are being
      charged against the  reserve as incurred; the interest  component related
      to lease payments is recorded as rent expense in the period incurred with
      no corresponding  increase in the  reserve. During the second quarter of
      1999, approximately $1 million in lease payments were charged against the
      reserve.  Payments  during  the  next  five  years  are  expected  to be
      approximately $2 million per year.

      Allowance  for  notes  receivable   -  In  connection  with   the Eckerd
      _________________________________
      acquisition, the Federal Trade Commission required the Company  to divest
      certain drugstores in North Carolina and South Carolina. A portion of the
      proceeds from  the sale of  these drugstores was financed  by the Company
      through a note  receivable for $33 million.  A reserve for 75 percent of
      the  face  value  of  the note  receivable  was  established  due to the
      significant constraints on the Company's  ability to collect on the note.
      No adjustments have  been deemed necessary through the  second quarter of
      1999.

      Other - The remaining  charges, the majority of which  have been expensed
      _____
      as incurred, were related to integration activities  for Fay's drugstores
      acquired by  the Company in  October 1996,  and other activities such as
      contract terminations. There  were no payments or other  changes to these
      reserves in the second quarter of 1999.

<PAGE>
                                         -6-

      1997 Charges:
      ____________
                               1997              1998          2nd Qtr 1999 YTD
                                         __________________  __________________
                              Y/E        Cash      Y/E          Cash    Ending
      ($ in millions)         Reserve    Outlays   Reserve      Outlays Reserve
                                         & Other                & Other
                              _______    __________________  __________________

      Department stores
          and catalog
      __________________
        Future lease
          obligations (1)       $  55    $ (35)    $  20        $   (3)   $ 17


      Eckerd drugstores
      _________________
        Future obligations,
          primarily leases (1)     35       (8)       27            (2)     25
                                ___________________________    _______________
      Total                     $  90    $ (43)    $  47        $   (5)   $ 42
                                ___________________________    _______________



      1) Reserve balances are included  as a component of accounts payable and
      accrued expenses.


      Department stores and catalog:

      Future  lease  obligations   -   In  1997,   the  Company  identified  97
      __________________________
      underperforming stores that did not meet the Company's  profit objectives
      and several support  units (credit service centers and  warehouses) which
      were  no longer  needed.  The  store closing  plan  anticipated that the
      Company would remain liable for  all future lease obligations. All stores
      had been  closed by the  end of 1998.  The reserve as  of the end  of the
      second quarter of 1999 represents future lease obligations, and costs are
      being charged against the reserve  as incurred. During the second quarter
      of  1999,  the  reserve  was reduced  by  $2  million,  which  amount was
      comprised  of  $3 million  in  rental payments  offset  by $1 million of
      interest accretion.


      Eckerd drugstores:

      Future  obligations,  primarily   leases  -   During  1997,   the Company
      ________________________________________
      established reserves for  the present value of future  lease payments for
      an additional portfolio  of drugstores that were  identified for closure.
      In addition, reserves were  established for pending litigation  and other
      miscellaneous charges, each individually insignificant. During the second
      quarter of 1999, $1 million in  lease payments  were charged against the
      reserve.  As of the  end of the second quarter  of 1999, these  combined
      reserves totaled $25 million.


      2. Earnings Per Share

      At  July 31,  1999 and August  1, 1998,  0.8 million shares  of preferred
      stock, which were  convertible into 15.2 million and  16.6 million common
      shares, respectively, were issued and outstanding. These potential common
      shares, and the  related dividend, were excluded from  the calculation of
      diluted earnings per share (EPS) for the 13 weeks ended July 31, 1999 and
      August  1,  1998 and  the 26  weeks  ended July  31, 1999,  because their
      inclusion would have had an anti-dilutive effect on EPS.

<PAGE>
                                         -7-

     ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS.

     Financial Condition
     ___________________

      On March 1,  1999, the Company completed the acquisition of Genovese Drug
      Stores,  Inc. (Genovese).  The acquisition  was  accomplished through an
      exchange of approximately 9.6 million shares of JCPenney common stock for
      the outstanding shares  of Genovese. The total value  of the transaction,
      including the  assumption of  approximately $60 million  of debt  and the
      conversion of outstanding Genovese options to options for JCPenney common
      stock, was $414 million. The acquisition is being accounted for under the
      purchase  method.  The  purchase  price  is  being  allocated  to assets
      acquired, including intangible assets (principally prescription files and
      favorable lease rights), and liabilities assumed based on their estimated
      fair value.  The excess  purchase price  over  the fair  value of assets
      acquired and  liabilities assumed  is being  classified  as goodwill and
      amortized over 40 years.

      Merchandise inventories on a FIFO basis totaled $6,530 million at the end
      of  the second quarter  compared with $6,486  million at the  end of last
      year's second  quarter. Current  year totals  include approximately $149
      million of inventory  attributable to Genovese drugstores  ($131 million)
      and  Renner department stores  ($18 million). Inventories  for department
      stores and catalog totaled $4,293 million at July 31, 1999 and were below
      last year levels as planned. Inventories for comparable department stores
      declined approximately 4.5 percent from  the prior year. Eckerd drugstore
      inventories  totaled $2,237  million compared  with  $2,034 million last
      year.  The current  cost of  inventories exceeded  the LIFO  basis amount
      carried on the  balance sheet by approximately  $251 million at July 31,
      1999 and $242 million at August 1, 1998.

      Properties,  net of accumulated  depreciation, totaled $5,459 million at
      July 31, 1999  compared with  $5,301 million  at the end  of last year's
      second quarter.

      Goodwill  and  other  intangible  assets,  net,  totaled  $3,211 million
      compared with  $2,899 million  as of August  1, 1998.  Approximately $316
      million  in intangible assets  and goodwill associated  with the Genovese
      acquisition has been recorded in 1999.

      At  July  31,  1999,  the consolidated  balance  sheet  included reserves
      totaling  $103 million  which are  included  as a  component of accounts
      payable and  accrued expenses  and $25  million which is  reflected as  a
      reduction to other assets. These  reserves were established in connection
      with the Company's 1996 and 1997 other charges, net, and relate to future
      lease obligations  on  stores  and  other support  facilities  closed in
      connection  with those  charges, and  a  note receivable  related to the
      divestiture of certain drugstores, respectively. In total, these reserves
      were reduced by $4 million in  the second quarter of 1999. See Note 1 to
      Interim Financial Information.

      During the  second quarter  of 1999, the  Company repaid  the outstanding
      principal amount, $225 million, of its 6.875 percent notes due 1999.


<PAGE>
                                         -8-


     Results of Operations
     _____________________

     Consolidated operating results
     ($ in millions)

                                        13 weeks ended        26 weeks ended
                                    ____________________  ____________________
                                    July 31,     Aug. 1,   July 31,    Aug. 1,
                                     1999         1998      1999        1998
                                     ____         ____      ____        ____

     Operating profit/(loss)
        Department stores
          and catalog              $  139       $  155    $  306       $  389
        Eckerd drugstores             (43)         (33)       86           86
        Direct marketing               60           60       114          113
        Real estate and other          11           (4)       20            2
                                   ______       ______    ______      _______
        Total operating profit        167          178       526          590

        Net  interest and
          credit operations           (82)        (115)     (137)        (208)
        Acquisition amortization      (25)         (18)      (62)         (53)
                                   ______       ______    ______      _______
        Income before income taxes     60           45       327          329
        Income taxes                  (21)         (18)     (121)        (128)
                                   ______       ______    ______      _______
        Net income                 $   39       $   27    $  206       $  201

                                   ======       ======    ======      =======



      Operating  profit (before  net interest  expense  and credit operations,
      acquisition amortization, and  taxes) totaled $167 million  compared with
      $178 million in last year's  second quarter. Department store and catalog
      results were negatively impacted by the decline in catalog sales volumes,
      particularly  in  the  July period.  Partially  offsetting  catalog sales
      results was  the performance of  the Company's private  brand merchandise
      which  posted collective  sales gains  of  9.4 percent  for the quarter.
      Eckerd  drugstores  recorded a  loss  for  the  quarter  as a  result of
      inventory adjustments, systems upgrades and  other items. Real estate and
      other reflects an  $8 million real estate  gain that was recorded  in the
      second quarter of 1999.

      Income before income taxes for  the 13 weeks ended July 31,  1999 was $60
      million, compared  with $45 million  in last year's period.  The increase
      reflected  continued improvement  in  net  interest  expense  and credit
      operations, primarily due  to lower bad debt expense.  Net income totaled
      $39 million,  or 12 cents per  share, as compared with $27  million, or 8
      cents per share in  last year's second quarter. On a  year to date basis,
      net income was  $206 million, or 73  cents per share, compared  with $201
      million, or 72 cents per share, last year.

<PAGE>
                                         -9-

     Segment Operating Results

      Department Stores and Catalog
      _____________________________

                                        13 weeks ended        26 weeks ended
                                    ____________________  ____________________
                                    July 31,     Aug. 1,   July 31,    Aug. 1,
                                     1999         1998      1999        1998
                                     ____         ____      ____        ____
     ($ in millions)
     Retail sales, net              $ 4,057      $ 4,060   $ 8,305     $ 8,302
     Cost of Goods Sold              (2,831)      (2,857)   (5,754)     (5,756)
     SG&A expenses                   (1,087)      (1,048)   (2,245)     (2,157)
                                    _______      _______  ________     _______
     Operating Profit (1)           $   139      $   155   $   306     $   389
                                    =======      =======   =======     =======


     Sales percent increase
       Total Department stores          0.5         (2.9)     (0.6)       (0.3)
       Comparable stores                1.0         (2.5)      0.3        (0.2)
       Catalog                         (2.8)         1.8       2.5         2.3
     Ratios as a percent of sales:
     FIFO gross margin                 30.2         29.6      30.7        30.7
     SG&A expenses                     26.8         25.8      27.0        26.0
     FIFO operating profit              3.4          3.8       3.7         4.7
     FIFO EBITDA (2)                    7.7          7.0       8.1         8.1


      1) Operating profit represents pre-tax income before net interest expense
      and credit operations and amortization of intangible assets.

      2) Earnings before interest, income taxes, depreciation and amortization.
      EBITDA includes finance revenue, net of credit operating costs and bad
      debt expense. EBITDA is provided as an alternative assessment of
      operating performance and is not intended to be a substitute for GAAP
      measurements; calculations may be different for other companies.


      Operating profit  for department stores  and catalog was $139 million in
      this year's second quarter compared with $155 million last year.  Sales in
      private brand merchandise were strong  for the period, especially Arizona
      Jean Co., St. John's Bay, and Delicates, all of which have posted double-
      digit sales gains for both the quarter and first half. Sales for supplier
      exclusive  brands,  in  particular  Crazy  Horse  by  Liz  Claiborne and
      Joneswear by Jones New York, also performed well. Sales of national brand
      athletic and basic  jeans categories did  not meet expectations. Catalog
      sales  declined in  the second quarter  as a  result of weak  July sales,
      which were affected by a slow start for Fall merchandise. Gross margin as
      a percent of  sales improved  by 60  basis points in  the second quarter
      compared to last year. The increase was principally related to growth in
      higher margin  private brand  merchandise and  a decrease  in promotional
      events, as planned.  Expense levels increased  3.7 percent compared with
      last year's second  quarter, an increase of 100 basis points as a percent
      of sales. Expenses were impacted  by planned increases in spending levels
      for customer service  initiatives in the stores, private brand marketing,
      and continued  spending for the  development of the  Company's e-commerce
      infrastructure.
      Operating profit for  the 26 weeks ended  July 31, 1999 was  $306 million
      compared  with $389 million last year.  Department store sales for the 26
      weeks  were up slightly  on a comparable  store basis, and  catalog sales
      increased  by 2.5  percent compared  with last  year.  Gross margin as a
      percent of  sales  was flat  with  last year  at  30.7 percent,  and was
      negatively impacted by a higher level of promotional

<PAGE>
                                         -10-

      activity  in  the first  quarter  in  an  effort to  rebalance inventory
      positions. SG&A  expenses for  the first  half increased approximately 4
      percent compared with  last year, an  increase of 100  basis points as  a
      percent of sales due to flat sales volumes.

      Eckerd Drugstores (1)
      _________________

                                        13 weeks ended        26 weeks ended
                                    ____________________  ____________________
                                    July 31,     Aug. 1,   July 31,    Aug. 1,
                                     1999         1998      1999        1998
                                     ____         ____      ____        ____
     ($ in millions)
     Retail sales, net              $ 2,976      $ 2,450   $ 6,023     $5,014
     Cost of Goods Sold              (2,446)      (2,024)   (4,852)    (4,027)
     SG&A expenses                     (573)        (459)   (1,085)      (901)
                                    _______      _______  ________    _______
     Operating profit/(loss) (2)    $   (43)     $   (33)  $    86     $   86


     Sales percent increase
       Total                           21.5          7.6      20.1        8.6
       Comparable stores               10.5          9.0      11.4        8.4
     Ratios as a percent of sales:
     FIFO gross margin                 18.2         17.7      19.8       20.0
     SG&A expenses                     19.2         18.7      18.0       17.9
     FIFO operating profit/(loss)      (1.0)        (1.0)      1.8        2.1
     FIFO EBITDA (2)                    0.6          0.4       3.3        3.3

     LIFO gross margin                 17.8         17.4      19.4       19.6
     LIFO operating profit/(loss)      (1.4)        (1.3)      1.4        1.7
     LIFO EBITDA (3)                    0.2          0.0       2.9        3.0

      1) Results  reflect the  inclusion  of  Genovese  drugstores as  of the
      acquisition date in March 1999.  Pro forma results, assuming the Genovese
      acquisition occurred at  the beginning of the periods  reported would not
      differ materially from reported results.

      2) Operating  profit  represents  pre-tax  income  before  interest and
      amortization of intangible assets.

      3) Earnings before interest, income taxes, depreciation and amortization.
      EBITDA is provided as an alternative  assessment of operating performance
      and  is  not   intended  to  be  a  substitute   for  GAAP measurements;
      calculations may be different for other companies.


      The Company's drugstore  operations experienced an operating  loss of $43
      million in  the second  quarter compared  with an  operating loss of $33
      million in last year's second quarter.  Results for the second quarter of
      1999   reflect  $119  million  in  pre-tax  costs  related  to inventory
      adjustments, systems upgrades and other items. Last year's second quarter
      was impacted  by pre-tax charges  of $114 million related  to integration
      activities.  Eckerd  experienced  continued strong  sales  growth  in the
      second   quarter,  increasing  by  10.5  percent  for  comparable stores
      (including the pro  forma results of the Genovese  drugstores acquired on
      March 1,  1999) which is  in addition  to a 9.0  percent increase in the
      second quarter of 1998. Comparable store sales were led by a 15.4 percent
      increase in pharmacy sales, which were particularly strong in the managed
      care segment. Managed  care sales accounted for approximately  87 percent
      of pharmacy sales  in the second quarter,  up from 84 percent  last year.
      Non-pharmacy sales, which increased by  3.4 percent on a comparable store
      basis, benefited from strong sales gains in Express Photo and convenience
      goods  categories.  Total   sales  in  1999's  second   quarter included
      approximately $222 million attributable to the recently acquired Genovese
      drugstores.

<PAGE>
                                         -11-

      FIFO gross  margin totaled  $542 million in  the second  quarter compared
      with $434 million in last  year's period. Gross margin reflects inventory
      adjustments of $74 million  and $98 million, in the respective periods. A
      gross  margin adjustment  was  required in  this  year's second quarter,
      principally to reflect higher than expected shrinkage that was identified
      through physical  inventories finalized  in the  second quarter.  Planned
      shrinkage rates for  1999 anticipated significant benefits  from the many
      changes  that  have been  and  continue  to  be  made  to  the inventory
      management  systems,  including  the  migration  from  Eckerd's accounts
      payable and  invoice verification system  to the more  automated JCPenney
      system. While  improvement has been realized, to date  it has not been as
      great  as originally  expected. Inventory  adjustments  in 1998's second
      quarter were principally related to higher than anticipated losses on the
      liquidation of merchandise categories during the conversion to the Eckerd
      format and higher than expected shrinkage. Excluding the effects of these
      charges, FIFO gross margin declined by  100 basis points as a percent of
      sales reflecting a  higher proportion of lower gross  margin managed care
      and  mail  order pharmacy  sales,  and  an  overall decline  in pharmacy
      margins. Eckerd recorded  a $12 million LIFO charge in 1999 compared with
      an $8 million charge last year.

      SG&A expenses increased  by 50 basis points as a percent  of sales in the
      second quarter. The increase was the result of $45 million of adjustments
      that were recorded  during the quarter related primarily  to the increase
      in  balance  sheet  reserves, principally  those  related  to third-party
      receivables and insurance claims, based on current information and growth
      in the business, and  an $18 million charge related to  the conversion of
      Eckerd's store communications system. Eckerd recorded integration related
      charges totaling $16 million in last year's second quarter. Excluding the
      effects of the charges taken in both  years, SG&A expenses declined by 40
      basis points as a percent of sales.

      Operating profit was  $86 million for the  26 weeks ended July  31, 1999,
      even  with last year.  Sales were strong  for the first  half, increasing
      11.4 percent on  a comparable store basis.  Same store sales were led by
      pharmacy  sales which increased by 16.3 percent; non-pharmacy merchandise
      sales increased by  4.1 percent for the period. FIFO gross margin for the
      first  half declined by  20 basis  points. Excluding  the effects  of the
      second quarter  charges, FIFO gross  margin declined by 90  basis points.
      The  decline in gross margin was principally related to growth in managed
      care  and mail  order pharmacy  sales which  carry lower  margins. Eckerd
      recorded a $24  million LIFO charge  in the first  half of 1999 compared
      with a $17 million charge in last  year's period. SG&A expenses increased
      by 10 basis points in total and declined by 30 basis points excluding the
      effects of second quarter charges.

<PAGE>
                                         -12-


      Direct Marketing
      _________________

                                        13 weeks ended        26 weeks ended
                                    ____________________  ____________________
                                    July 31,     Aug. 1,   July 31,    Aug. 1,
                                     1999         1998      1999        1998
                                     ____         ____      ____        ____
     ($ in millions)
     Revenue                        $   276      $   251   $   550     $  497
     Costs and expenses (1)            (216)        (191)     (436)      (384)
                                    _______      _______  ________    _______
     Operating Profit (2)           $    60      $    60   $   114     $  113


     Revenue, percent increase         10.0          9.6      10.7        9.7
     Operating profit as a percent
        of revenue                     21.7         23.9      20.7       22.7

      1) Includes amortization of deferred acquisition costs of $56 million and
      $46 million for the  second quarter and $109 million and  $92 million for
      the first half of 1999 and 1998, respectively.

      2)  Operating profit  represents pre-tax  income  before amortization of
      intangible assets.


      Revenue totaled $276  million in the second quarter and  $550 million for
      the first half, an increase of approximately ten percent for both periods
      compared with last  year. The increase was principally  related to health
      insurance premiums  which account for  approximately 62 percent  of total
      revenues. Revenue generated  from membership services  products increased
      by 54 percent compared  with last year's second  quarter and first  half.
      These products  represent a  growing business  for  Direct Marketing and
      currently  account for  approximately eight  percent  of total revenues.
      Operating  profit totaled  $60 million  for the  quarter, flat  with last
      year, and is up slightly for the year.  Current year operating profit has
      been impacted  by planned  expenditures for new  product development and
      international expansion activities in the United Kingdom and Pacific Rim.


      Net Interest Expense and Credit Operations
      __________________________________________

                                        13 weeks ended        26 weeks ended
                                    ____________________  ____________________
                                    July 31,     Aug. 1,   July 31,    Aug. 1,
                                     1999         1998      1999        1998
                                     ____         ____      ____        ____
     ($ in millions)
     Revenue                        $   172      $   168   $   364     $  351
     Bad debt expense                   (22)         (57)      (35)       (98)
     Operating expenses                 (78)         (78)     (162)      (165)
     Interest expense, net             (154)        (148)     (304)      (296)
                                    _______      _______  ________    _______
     Total                          $   (82)     $  (115)  $  (137)    $ (208)


     Net interest  expense and  credit operations totaled  $82 million  in the
     second quarter compared  with $115 million in the  comparable period last
     year.  The decline  from  last  year reflected  improvement  in bad debt
     levels. Bad debt expense in the second quarter was $35 million below last
     year's level principally  as a result of significantly  lower delinquency
     rates, due  in part to the  Company's previous efforts to  tighten credit
     underwriting  standards to  improve portfolio  performance.  Net interest
     expense and  credit operations  totaled $137 million  for the  first half
     compared with  $208 million last  year. The improvement  for the 26 week
     period was principally related to increased

<PAGE>
                                         -13-

      late fee revenue  and significantly lower bad debt expense. As of the end
      of the quarter, the 90-day  delinquency rate was 2.7 percent  of customer
      receivables, down from 4.1 percent at the  end of second quarter 1998. As
      of the end  of the quarter, customer receivables  serviced totaled $3,497
      million, a decrease of $331 million, or 8.6 percent, compared with a year
      ago.


      Income Taxes
      ____________

      The Company's  effective income tax  rate was 37.6 percent  in the second
      quarter compared with 38.9 percent last year.


      Year 2000
      _________

      The  Year 2000  issue  exists  because many  computer  systems store and
      process dates using only the last two  digits of the year.  Such systems,
      if not changed,  may interpret "00" as "1900" instead of the year "2000."
      The Company  has been working  to identify  and address Year  2000 issues
      since  January  1995.   The  scope  of  this effort  includes internally
      developed information technology systems, purchased  and leased software,
      embedded systems, and electronic data interchange transaction processing.

      In October 1996, a company-wide task force was formed to provide guidance
      to the  Company's operating  and support departments  and to  monitor the
      progress of efforts  to address Year 2000  issues.  The Company  has also
      consulted with  various third  parties, including,  but  not limited to,
      outside consultants, outside service providers, infrastructure suppliers,
      industry groups, and other  retail companies and associations  to develop
      industry-wide  approaches to  the Year  2000 issue,  to gain insights to
      problems,  and to provide additional perspectives on solutions. Year 2000
      readiness work was  more than 99  percent complete as  of July 31, 1999.
      Since January 1999,  the Company has been retesting  all systems critical
      to the Company's core business.  The Company has also focused on the Year
      2000 readiness of its suppliers and service providers, both independently
      and in conjunction with the National Retail Federation.

      Despite  the  significant  efforts to  address  Year  2000 concerns, the
      Company  could  potentially   experience  disruptions  to  some  of its
      operations, including those  resulting from noncompliant systems used by
      third  party  business  and  governmental  entities.    The  Company has
      developed contingency plans  to address potential Year  2000 disruptions.
      These  plans include business continuity plans that address  accessibility
      and functionality of Company  facilities as well as steps to  be taken if
      an event  causes failure  of  a system  critical  to the  Company's core
      business activities.

      Through July 31, 1999, the Company had incurred approximately $44 million
      to  achieve Year  2000 compliance,  including  approximately $10 million
      related to capital  projects. The Company's remaining cost  for Year 2000
      remediation is currently  estimated to be $5  million.  Total  costs have
      not had, and are not expected to have, a material impact on the Company's
      financial results.


      New Accounting Rules
      ____________________

      The   Financial  Accounting  Standards  Board  has  issued  Statement of
      Financial  Accounting  Standards  No.  133,  "Accounting  for Derivative
                                                  ____________________________
      Instruments  and Hedging  Activities", which  is  effective for quarters
      _____________________________________ beginning after  June 15,  2000.
      The Company has a  limited exposure to derivative  products  and  does not
      expect  these  new rules  to have a material impact on reported results.

<PAGE>
                                         -14-

      The Company's  business depends to a great extent  on the last quarter of
      the year. Historically, sales for that period have averaged approximately
      one third  of annual sales.   Accordingly, the results of  operations for
      the 13 and 26 weeks ended July 31, 1999 are not necessarily indicative of
      the results for the entire year.



     ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company holds an interest rate swap with a notional principal amount
      of $375  million entered into in  connection with the  issuance of asset-
      backed  certificates in 1990. This swap presents  no material risk to the
      Company's results of operations.





      This report 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  competition, consumer
      demand,  seasonality, economic  conditions, and government  activity, and
      the year 2000 compliance readiness of the Company's suppliers and service
      providers  as  well as  government agencies.  Investors should  take such
      risks and uncertainties into account when making investment decisions.



<PAGE>
                                         -15-


     PART II - OTHER INFORMATION


     ITEM 1 - LEGAL PROCEEDINGS.

          The Company has no material legal proceedings pending against it.


     ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          The Annual Meeting of Stockholders of the Company was held on May 21,
          1999, at which the six matters described below were submitted to a
          vote of stockholders with the voting results as indicated.

          (1)    Election of directors for a three-year term expiring at the
                 Year 2002 Annual Meeting of the Company's stockholders:

                    NOMINEE               FOR               AUTHORITY WITHHELD
                    _______               ___               __________________
                 T. J. Engibous         235,174,252               9,421,754
                 K. B. Foster           235,270,296               9,325,710
                 A. W. Richards         230,571,731              14,024,275

          (2)    The Board of Directors' proposal concerning the employment of
                 KPMG LLP as auditors for the fiscal year ending
                 January 29, 2000:

                    FOR                  AGAINST                    ABSTAIN
                    ___                  _______                    _______
                 240,501,517            2,933,698                 1,160,740


          (3)    A stockholder resolution concerning the elimination of the
                 classification of the Board of Directors:
                                                                      BROKER
                    FOR            AGAINST           ABSTAIN          NON-VOTES
                    ___            _______           _______          _________
                 123,243,098     99,865,048         2,302,787        19,185,073


          (4)    A stockholder resolution concerning a bylaw amendment relating
                 to the submission to a stockholder vote of the Company's
                 Stockholder Rights Plan:

                                                                      BROKER
                    FOR            AGAINST           ABSTAIN          NON-VOTES
                    ___            _______           _______          _________
                  127,083,509    95,609,316         2,734,961        19,168,220


          (5)    A stockholder resolution concerning independence of the Board
                 Chair:

                                                                      BROKER
                    FOR            AGAINST           ABSTAIN          NON-VOTES
                    ___            _______           _______          _________
                 42,830,387     179,922,960         2,652,687        19,189,972

<PAGE>
                                         -16-


          (6)    A stockholder resolution concerning performance-based stock
                 option grants:

                                                                      BROKER
                    FOR            AGAINST           ABSTAIN          NON-VOTES
                    ___            _______           _______          _________
                 50,826,035      169,695,534        4,905,651        19,168,786


     ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.

          (a)     Exhibits
                  ________

                  The following documents are filed as exhibits to this report:

                  10(a)  J. C.  Penney Company,  Inc.  1999 Separation
                         Allowance Program for Profit-Sharing  Management
                         Associates, effective July 14, 1999, as amended
                         September 8, 1999.

                  10(b)  July 14,   1999  amendment   to  the  Supplemental
                         Retirement Program for Management Profit-Sharing
                         Associates of J. C. Penney Company, Inc.

                  10(c)  July 14, 1999 amendment to the J. C. Penney Company,
                         Inc. Benefit Restoration Plan.

                  10(d)  July 14, 1999 amendment to the J. C.  Penney Company,
                         Inc. Mirror Savings Plan I and the J.  C. Penney
                         Company, Inc. Mirror Savings Plan II.

                  11     Computation of net income per common share.

                  12(a)  Computation of ratios of available income to combined
                         fixed charges and preferred stock dividend requirement.

                  12(b)  Computation of ratios of available income to fixed
                         charges.

                  27(a)  Financial Data Schedule for the six months ended
                         July 31, 1999.

                  27(b)  Restated Financial Data Schedule for the six months
                         ended August 1, 1998.

          (b)     Reports on Form 8-K
                  ___________________

                  None.

<PAGE>
                                         -17-







                                      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.











                                        J. C. PENNEY COMPANY, INC.




                                        By     /S/W. J. Alcorn
                                          _______________________________
                                                  W. J. Alcorn
                                        Vice President and Controller
                                        (Principal Accounting Officer)




Date:  September 13, 1999