J.C. Penney sales plunge, cuts dividend

J.C. Penney Co Inc. (JCP-N) reported an 18.9-percent decline in first-quarter sales at stores open at least a year and discontinued its dividend to help fund its ongoing overhaul.

In February, Penney began a multiyear transformation when Penney eliminated hundreds of sales events in favor of everyday prices on most items, a radical departure that analysts predicted would confuse or alienate its customers.

Chief executive Ron Johnson said in a statement that "sales and profitability have been tougher" than expected.

Penney is eliminating its 20 cents US per share quarterly dividend to have $175 million in additional cash to fund its transformation.

Total net sales fell 20.1 percent to $3.15 billion, below the $3.41 billion Wall Street was expecting, according to I/B/E/S.

Analysts had been expecting a same-store sales decline of 12.2 percent, according to Thomson Reuters I/B/E/S.

Penney reported a net loss of $163 million, or 75 cents per share, for the quarter ended April 28, compared with a profit of $64 million, or 28 cents per share, a year ago.