Attention J.C. Penney Shoppers: No More Dividend; Shares Plunge

Shares of department store operator J.C. Penney are tumbling as much as 14% in Tuesday's after-hours session after the Texas-based company said it will discontinue its quarterly dividend in an effort to save cash. J.C. Penney paid a quarterly dividend of 20 cents a share, good for a yield of 2.8% at the close of markets today. Eliminating the payout will result in cash savings of approximately $175 million, which will be used to help fund the broad-based transformation plan that jcpenney announced in January, the company said in a statement. J.C. Penney reported a quarterly loss of $55 million or $0.25 per share. On a GAAP basis, the copany reported a net loss of $163 million or $0.75 per share. Overall sales plunged 20.1% while same-store sales slid 18.9%. Gross margin was 37.6 percent of sales, compared to 40.5 percent in the same period last year. "Sales and profitability have been tougher than anticipated during the first 13 weeks but the transformation is ahead of schedule.  Customers love the new jcp they discover in our stores.  Our shop strategy has been applauded by vendor and design partners, our merchants have stepped up to the challenge of improving our merchandise and presentation, we have dramatically simplified our business model and reorganized our teams at headquarters and in our stores.  While we have work to do to educate the customer on our pricing strategy and to drive more traffic to our stores, we are confident in our vision to become America's favorite store.  We fully expect that the bold and strategic changes we are making to our operations will result in improved profitability and sustainable growth over the long term," CEO Ron Johnson said a in statement. Johnson came to J.C. Penney from Apple AAPL where he led the tech juggernaut's retail strategy. Shares of J.C. Penney have lost almost 11% in the past year, not including today's after-hours beating.