JC Penney customers disdain overhaul JC Penney's like-for-like sales dropped almost 19 per cent in the past quarter as customers turned their backs on reforms initiated by Ron Johnson, the chief executive and former head of retail at Apple. The department store, which reported a worse net loss than expected, said it no longer expected to meet its annual earnings guidance and announced that it would stop paying its quarterly dividend of 20 cents per share. The results signalled an unexpectedly weak start to the overhaul led by Mr Johnson, who said it was proving to be "tougher than anticipated." His appointment triggered a share rally last year as investors hoped he would bring some Apple magic to a tired department store. But JC Penney shares fell 12.7 per cent to $29.08 in after-hours trading on Tuesday, leaving them down nearly 30 per cent since the end of February when it first said sales were trending below last year. At the start of the quarter, JC Penney began to implement Mr Johnson's plans, which included an end to unpredictable discounting, and shaking up merchandise, store design and advertising. Sales at stores open at least a year, a key retail metric, plunged 18.9 per cent in the three months to April 28. Total sales fell 20.1 per cent from a year ago to $3.2bn. "It is really hard," Mr Johnson told investors at an event in New York. It's hard for me, hard for the team, hard for everybody . . . But we are getting through it. JC Penney expected its transformation to take four years, and after three months the plan was "way ahead of schedule," he said, adding that the company had expected sales to be down initially. Some analysts had questioned whether customers long accustomed to bargain hunting and discount coupons would warm to the simplified, unchanging price tiers of JC Penney's new "fair and square" pricing policy. Mike Kramer, JC Penney's chief operating officer, said the number of customers visiting its stores was down 10 per cent from a year ago, but that the proportion who bought something was similar: 21 per cent versus 22 per cent last year. Mr Johnson admitted that a JC Penney advertising blitz in the quarter had failed to communicate to consumers exactly what its new pricing policy meant, namely three price tiers with the highest one 30-50 per cent below prices last year. The quarterly net loss was $163m, or 75 cents per share, which it blamed partly on the costs of job losses, management changes, pension expenses and reducing its inventory levels. Last month, JC Penney announced 600 job cuts at its head office in Plano, Texas, and 300 at a call-centre it is closing in Pittsburgh. This month it began to lay off an unspecified number of employees at its 1,100 stores.