"It's the worst performance I have ever seen by a company in one year," said Walter Loeb, an independent retail consultant.
Wall Street hasn't been any happier than Main Street with Penney's changes. On the news of its quarterly results, which were reported after markets were closed for the day, Penney shares fell about 9 percent about $19 in after-hour trading.
In total, investors, who initially sent Penney shares soaring 24 percent to about $43 after the company announced the everyday pricing plan in late January of last year, have pushed them down by about half since early last year.
It's a disappointing turn of events from November 2011 when Johnson took the top job at Penney. A couple of months later, on Feb. 1 of last year, Johnson launched a new pricing that was designed to wean customers off the markdowns they'd become accustomed to, but that ultimately eat into profits.
He got rid of the nearly 600 sales Penney offered at various times throughout the year for a three-tiered strategy that permanently lowered prices on all items in the store by 40 percent, offered monthlong discounts on select items and periodic clearance events throughout the year. He also got rid of the word "sales" from the company's marketing and rolled out colorful ads that featured dogs and children.
But customers weren't responding to the changes, so Johnson tweaked his strategy a few times, including bringing back the word "sale" last summer. The latest changes came this month when Penney began adding back more sales events. It also started putting price tags on half of its merchandise that show customers how much they're saving by shopping at Penney, and rolled out new ads.
Penney said Wednesday that it now will focus on discounting its store label merchandise like Arizona, not the new brands like Joe Fresh, which features brightly colored clothes.
In addition to those changes, Johnson has said that Penney is starting to see some positive results from its makeover of stores with sectioned-off shops that feature different brands. The company said the reception has been warm to the 10 mini-shops that it rolled out this fall, including those for Levi's brand and Penney's new JCP line of casual clothes. Other brands, including Joe Fresh, will be rolled out in coming years.
Johnson, who had previously said that the stores would remodeled by the end of 2015, on Wednesday backtracked a bit:
"The customer will dictate the timing," he said.
But the worry on Wall Street is that Johnson won't be able to turn around business fast enough to finance the transformation of its stores. In November, Penney said that it would end last year with $1 billion in cash. Penney winded up ending the year with $930 million in cash, which was better than analysts had feared but below the company's target.
Penney said Wednesday that it had short-term access to $3 billion in short-term capital to finance its multi-year transformation. And customers like Ricky Rodriguez, from Fort Worth, Texas, offer hope for the company.
"I feel like the guy section is getting more hip," said the 27-year-old who recently bought a dress shirt for $25 at Penney. "I've been going there every other week."