NEW YORK (AP) — Fitch Ratings is lowering the issuer default ratings of J.C. Penney further into junk status as investors worry that the department store operator's everyday low pricing strategy won't work.
Fitch's announcement on Tuesday follows a similar move made by Standard & Poor's on Friday. J.C. Penney also reported on Friday its third consecutive quarter of big losses and sales declines since it decided earlier this year to get rid of hundreds of coupons and sales annually in favor of predictable low prices every day.
On Monday shares of J.C. Penney Co. Inc. dropped to their lowest price in more than three years. The shares fell more than 13 percent on Monday — the biggest percentage decline by far for the day among big companies in the S&P 500 index. It closed at just under $18. The stock has lost nearly half of its value this year.
J.C. Penney announced its pricing plan in late January, but customers haven't warmed to it and investors have grown cold on the stock.
Fitch said Tuesday that it was reducing the retailer's issuer default ratings to "B'' from "BB-." The rating outlook is "Negative," implying that further downgrades are possible.
The Plano, Texas company's shares shed 16 cents to $17.81 in morning trading. Earlier in the session the stock dropped to $17.61, another multiyear low.