The new stores, most of which will open on off-mall sites, is acontinuation of the company's expansion into open-air real estate."Our off-mall format allows us to enter communities that may nothave shopping malls, but where there is significant demand," saidMyron Ullman, J.C. Penney's chairman and chief executive officer,during the retailer's fourth-quarter conference call.

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Of the company's 1,033 units, 640 are currently in malls. Thenon-mall stores are in neighborhoods that get more weekday traffic,while the mall units get a majority of their business on weekendsand other key shopping days, Ullman says.

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During the company's fourth quarter, same-store sales were up2.2% year over year. For all of 2006, same-store sales rose 3.7%.Management predicts a low-single-digit increase for the currentfirst quarter and the remainder of the 2007 fiscal year.

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Net sales were nearly $6.7 billion for the quarter, an increaseof 7.4% from the prior year. But net income fell to $477 million,from $551 million during the fourth quarter of 2005.

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