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NEW YORK (CNNMoney) -- J.C. Penney gave investors two reasons to run on Tuesday. The retailer cut its dividend and revealed that sales are dropping dramatically.
The budget-conscious chain said same-store sales dropped roughly 19% in the first quarter of 2012.
That drop shows that J.C. Penney (JCP, Fortune 500) -- under the guidance of Apple's (AAPL, Fortune 500) former retail chief Ron Johnson -- is not only failing to bring in new customers, it's also struggling to keep the old ones.
Meanwhile, the company said it would cut its quarterly dividend of 20 cents a share in order to save $175 million per year.
The company said online sales of $271 million in the first quarter represented a nearly 28% drop from the previous quarter.
Shares of J.C. Penney dropped nearly 12% in after-hours trading. Before Tuesday's close, its stock was down 4.5% in 2012, after surging in the latter part of 2011.
J.C. Penney reported a loss of $55 million, or 25 cents a share, on roughly $3.2 billion in quarterly sales. Analysts expected a loss of 8 cents a share.
"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," CEO Ron Johnson said in a press release.
On the bright side, J.C. Penney said its expenses decreased by $121 million during the first quarter compared to the same period in 2011. The company said it plans to accelerate cost cutting in 2012.
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