J.C. Penney (NYSE:JCP) had a prosperous July. The retailer reported some hot comps for the month. Is 10.8% hot enough for you? That's a pretty fine double-digit number, but a little bit of context is necessary to see why I'm not necessarily so impressed by it.

Thanks to the vagaries of the calendar (you know, that 53rd week that pops up every so often and throws everything off?), J.C. Penney's July sales figures included part of the first week of August. Why is this important to note? Well, back-to-school shopping tends to commence around the beginning of August. The company correctly highlighted this for investors, because those few days would affect comparisons with July of 2006; in that month there was a same-store sales gain of only 4.9%.

Here are some other data points that put the 10.8% statistic in perspective. For the 13-week period, J.C. Penney's same-store sales grew by 1.9%, compared with a gain of 6.6% in the similar time frame a year ago. For the past six months, comps increased 2.1% compared with 3.9% in the previous year. In addition, total sales for the company's department stores for the past six months were flat. In fact, J.C. Penney did hit a snag last month.

So, one could argue that there's room for improvement in terms of the slowing growth rates. J.C. Penney is going to have to fight for every back-to-school shopping dollar with every other retailer out there. Gap (NYSE:GPS), Aeropostale (NYSE:ARO), American Eagle Outfitters (NYSE:AEO), Abercrombie & Fitch (NYSE:ANF), and TJX Companies (NYSE:TJX) are all at the malls, and they're all hungry -- Gap probably needs to get a bit more hungry, however.

While J.C. Penney needs to focus on keeping comps healthy, it's done well the last few years, judging by the company's latest 10-K filing. Earnings per diluted share from continuing operations for 2004, 2005, and 2006 were $2.20, $3.83, and $4.88, respectively. Cash flow has been decent, as well. And when I look at Ryan Fuhrmann's valuation argument (which you can read here), I have to agree that J.C. Penney is a retailing idea for stock shoppers.

Over the last several months, J.C. Penney's comps may not be as robust as they once were, but keep in mind that they're still in the positive column. With the stock appearing to be inexpensive, and with management recently hiking the dividend, I'd say that investors might want to put this one on the watch list.

Have some more Foolish fun with J.C. Penney:

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Fool contributor Steven Mallas owns none of the companies mentioned. As of this writing, he was ranked 11,123 out of more than 60,000 investors in the Motley Fool CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.