J.C. Penney (JCP) swung to a loss after reporting a sharp 23% decline in second-quarter sales, but CEO Ron Johnson said the retailer’s transformation is “on track.”

The company has had a series of disappointing quarters despite undergoing a massive overhaul that is supposed to fix its price strategy and revamp the department store’s image.

In June, J.C. Penney’s highly-coveted president, Michael Francis, who was poached from Target (TGT) to help lead the retailer’s turnaround efforts, left after just eight months.

The Plano, Texas-based company reported net loss of $147 million, or 67 cents a share, compared with a year-earlier profit of $14 million, or 7 cents.

Excluding one-time items, the company lost 37 cents a share, worse than the 25-cent loss forecast by analysts in a Thomson Reuters poll.  

Revenue for the three months ended July 28 was $3.02 billion, down 22.6% from $3.91 billion, narrowly below the Street’s view of $3.2 billion. Comparable-store sales – a highly-watched growth metric for retailers – fell by 21.7%, while online sales dipped 32.6%.

J.C. Penney also said it “no longer anticipates achieving the previously issued non-GAAP earnings guidance” for fiscal 2012, but said the company expects to end the year with at least $1 billion of cash on the balance sheet even after spending $800 million on the restructuring.

Shares of J.C. Penney soared more than 9% premarket to $24.

The company’s selling, general and administrative expenses declined by $193 million and the company said that while the transition will take time, JC Penney “will stay the course.”

“We have now completed the first six months of our transformation and while business continues to be softer than anticipated, we are confident the transformation of jcpenney is on track,” Johnson said in a statement.

However, investors have remained skeptical that the company will be able to make enough changes to navigate successfully through the key holiday season.

While J.C. Penney in February eliminated the use of coupons and discounts and started running under campaign of "everyday low prices," it continues to bleed customers, leading to its second straight quarter of steep sales declines.

Follow Jennifer Booton on Twitter at @Jbooton