Even after Penney reinstated its old pricing strategy in the spring, sales again fell.
The company's shares tumbled 15 percent on Wednesday after Goldman Sachs said in a research note it expects the retailer's sales to improve more slowly than expected through the end of the year. In intraday trading on Wednesday, the shares dropped to a 13-year low.
The note also raised questions about Penney's liquidity.
(Read more: JC Penney's holiday hiring plans)
"In order to safeguard against a potentially poor 4Q (fourth-quarter) holiday season, it is likely that management will look to build a bigger liquidity buffer," Goldman analyst Kristen McDuffy wrote in her note on Wednesday.
Earlier this year, Goldman arranged a $2.25 billion loan for Penney to shore up its finances.
Last month, Penney said it expected to have $1.5 billion in cash at the end of its fiscal year on Feb. 1, enough to have ample merchandise on shelves.
(Read more: JC Penney stock is getting killed after tough Goldman report)
The cost for insurance against a J.C. Penney default has shot back to near record-high levels during the last week. With about $2.6 billion in bonds outstanding, the company has a "CCC " credit rating from Standard & Poor's, reflecting a substantial risk in owning its debt.
The company's benchmark five-year credit default swap contract price surged by more than 13 percent on Wednesday, according to Markit data.
The cost to insure $10 million of Penney bonds against a default for five years now requires an upfront payment of about $2.2 million plus quarterly payments of about $300,000 for the duration of the contract.
The contract's pricing reflects a default probability of nearly 65 percent.