On Friday, J.C. Penney Company, Inc. (NYSE: JCP) reported very disappointing second-quarter results, reporting a loss of 37 cents a share after the company sales dropped 22.6% from the year earlier period.

However, shares of the retailer rose Friday nearly 6% after after newish-CEO Ron Johnson had said his overhaul strategy is on track.  But that rally looks short-lived. Today shares of J.C. Penney are down 3.06% to 22.68.

Since Johnson took over the reigns in the summer of 2011, he has tried to wean shoppers off of discounts, which J.C. Penney was well known for, and has tried to turn the retailer into a hub of consistently low prices. However, that strategy has hit major headwinds. Shares have fallen nearly 35% in 2012 alone. Meanwhile, shares of competitor Macy’s, Inc. (NYSE: M) have risen about 15% in the same time, while Target Corp. (NYSE: TGT) shares have risen 22%.

Johnson has been forced to backtrack on some of his plans. He has moved free on three-tier pricing plan back down to a two-year pricing plan, and has decided to bring back the word “clearance” in the store due to customer dissatisfaction.

However, Johnson said Friday that the company’s overhaul plans are heading in the right direction. He also pointed to his idea that J.C. Penney would move to become a paperless store.

“I’m completely convinced that out transformation is on track,” Johnson told analysts and investors Friday, according to Bloomberg, noting “…we said this would be a really tough year. Somehow, I don’t think that message got through.”

Samuel Weigley

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