Penney's past: The good and bad An indication of what a renewed Penney could accomplish can be found in the firm's past performance. Penney's current business is clearly in a sorry state. Last year's result is ample proof. Net sales fell over 24% in 2012, compared to the prior year. The drop was due to a massive customer exodus when the company tried to enter the up-market specialty store space. Comparable-store sales, an important indicator of a retailer's health, dropped over 25%. Profitability also plummeted. Penney's gross margins as a percentage of sales fell to a dismal 31.3%, compared to 36% in 2011. The company posted a stunning cash earnings loss of around $643 million, compared to profits of $411 million a year earlier. J.C. Penney wasn't always in such a dire way, however. It has delivered respectable results in the past, even in tough economic times.