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J. C. Penney Company, Inc.’s (JCP - Free Report) troubles seem far from over, as the stock plunged 10.6% yesterday, after the company provided an update on its sales performance during the holiday period and the fourth quarter of fiscal 2013.

This Plano, Texas-based retailer stated that comparable-store sales for the quarter rose about 2%, which came below analysts’ expectations. This was enough to hurt investors’ sentiment, despite the comps having fared significantly better than the substantial decline of 31.7% in the prior-year quarter and breaking the streak of negative comps since the second quarter of 2011.

Comparable-store sales during the nine-week November and December holiday period grew 3.1%. The holiday season was a tough one and while some made their way out, others struggled to lure budget-constrained consumers. The soft economic recovery, fragile job market and stiff competition from e-commerce retailers compelled retailers to resort to aggressive pricing at the cost of margins.

However, J. C. Penney, which undertook promotional strategy to drive in traffic, remained silent on margins. The categories that outperformed during the holiday period, include beauty (Sephora), activewear, sweaters, outerwear, dresses, boots, men’s clothing, luggage and housewares. The company ended the quarter with a total liquidity of $2 billion.

In the recent past, J. C. Penney hinted that it was satisfied with the sales performance during the holiday season but did not provide any sales data for December. However, it did come out with the sales data for October and November in which comparable store sales marked an increase of 0.9% and 10.1%, respectively.

J. C. Penney, which competes with Kohl's Corp. (KSS - Free Report) has been in troubled waters for quite sometime, given its waning revenues and increased losses. However, the company has taken several strategic initiatives to drive traffic and conversion. The company reverted to promotions, which could be a successful sales driver.

CEO, Myron Ullman is trying all means to bring the company back on the growth trajectory, following the failure of the ambitious transformational ideas of Ron Johnson, who was discharged of his duties after 17 months in Apr 2013.

Currently, J. C. Penney carries a Zacks Rank #3 (Hold). Some better-ranked retail stocks include Macy’s, Inc. (M - Free Report) and Michael Kors Holdings Ltd (KORS - Free Report) both sporting a Zacks Rank #2 (Buy).

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