The Company also reported on its initiatives to fix and stabilize the business and return to profitable growth.

Financial results for the quarter include:

jcpenney reported net sales of $2.66 billion compared to $3.02 billion in the fiscal second quarter of 2012. Comparable store sales declined 11.9% in the quarter, and were negatively impacted by the Company's failed prior merchandising and promotional strategies, which resulted in unusually high markdowns and clearance levels in the second quarter.  

In addition, the lengthy renovation and disappointing re-merchandising of its Home departments adversely impacted the Company's comparable store sales during the second quarter. Overall, the performance of the Company's Home division had a 240 basis point impact on its comparable store sales for the quarter. 

Despite these challenges, comparable store sales for the quarter improved sequentially by 470 basis points when compared to the first quarter of fiscal 2013. In addition, sales results improved sequentially each month within the second quarter, a trend the Company expects to continue through the back half of the year. 

Gross margin was 29.6 percent of sales, compared to 33.2 percent in the same period last year. Gross margin was negatively impacted by lower than expected sales, and a higher level of clearance merchandise sales during the quarter including merchandise carried over from the first part of the year.

During the quarter, the Company enhanced its liquidity by entering into a $2.25 billion senior secured term loan facility. In addition, the Company paid $355 million to complete a cash tender offer and consent solicitation with respect to substantially all of its outstanding 7 1/8% Debentures due 2023. In doing so, the Company also recognized a loss on extinguishment of debt of $114 million reducing earnings per share by $0.52.

Second quarter results reflect an effective tax rate of 3.0% compared to 36.4% in the previous quarter. The lower tax benefit is primarily driven by a charge of approximately $218 million to record an increase to the tax valuation allowance for deferred tax assets that negatively impacted earnings in the quarter by approximately $0.99 per share.

Click here to read full results

JC Penney