After the bell on Wednesday, J.C. Penney Company, Inc. (NYSE:JCP) announced that for the fourth quarter, sales at stores open at least a year tanked 31.7 percent. This was much worse than expected as analysts had estimated sales to drop 27.8 percent.

With the huge decline, which encompassed holiday numbers, it now puts Chief Executive Ron Johnson’s job at risk. He said in the earnings conference call via Reuters, “We also made some big mistakes and I take personal responsibility for these.”

For the fourth quarter, J.C. Penney Company, Inc. (NYSE:JCP) said its fourth-quarter net loss was $428 million or a $985 million loss for the full year.

Revenue decreased to $3.88 billion from $ 5.43 billion in the previous year. Analysts had expected $4.08 billion in revenue.

With the exclusion of restructuring charges and non-cash pension plan expenses, J.C. Penney Company, Inc. (NYSE:JCP) reported an adjusted loss of $1.95 per share as compared to the previous year’s $0.74 profit. Analysts had expected an $0.18 per share loss.

Net sales dropped 27 percent to $3.88 billion. This fall was almost three times worse than expected by analysts.

The company’s gross margin represented 23.8 percent of sales, a 6.4 percent decline from the previous year. It had been attributed to lower-than-expected sales numbers and a greater number of clearance sales.

Ron Friedman, a retail practice leader at the consulting firm Marcum LLP said via Reuters, “He’s going to have recover this year or he’s done. He’s running out of time. He has to have it turned around by the third quarter.”

Johnson also said in the conference call the company has returned to sales and coupons after getting rid of both after restructuring. The sales will occur on a weekly basis.

Retail analyst Stacey Widlitz said via CNBC, “Ron Johnson basically just admitted that he’s made a mistake — that the consumer has voted and they vote for discounts. So, he’s going back to discounting. This company spent a billion dollars in the last year to take away discounts and do a 180 and go back to where they came from. And he’s still choosing to call the discounts a gift.”

Meanwhile, hedge fund manager William Ackman of Pershing Square Capital Management is the retailer’s top shareholder. He has constantly shown his support for Johnson’s strategy and has believed it would take a few years for this to be accomplished.

It sounds like Johnson plans to soldier on. He also expressed optimism and said in the earnings statement, “Sales and customer traffic were below our expectations in 2012, but as we execute our ambitious transformation plan, we are pleased with the great strides we made to improve jcpenney’s cost structure, technology platforms and the overall customer experience.  We have accomplished so much in the last twelve months.  We believe the bold actions taken in 2012 will materially improve the Company’s long-term growth and profitability.”

The company’s bad news follows other retailers including  The Home Depot, Inc. (NYSE:HD), Lowe’s Companies Inc., (NYSE:LOW), Macy’s Inc. (NYSE:M) and Target Corporation (NYSE:TGT),  who had all exceeded analysts’ expectations from their fourth quarter earnings reports.

In after-hours trading, J.C. Penney Company, Inc. (NYSE:JCP)’s shares fell 14.18 percent to $18.16.