Ratings agency Standard & Poor's downgraded J.C. Penney Co Inc on Wednesday, citing deterioration of the department store chain's earnings since it implemented a new pricing strategy, and its expectation that the next 12 months will be difficult for the company.

S&P lowered its corporate rating on Penney to 'B+' from 'BB-.' S&P had cut its rating in March and again in May.

Earlier this year, Penney eliminated coupons and most sales events, resulting in an 18.9 percent decline in same-store sales in its fiscal first quarter.

"Over the next 12 months, we expect Penney is likely to experience further operational disruptions as it implements the new strategy," S&P said. It cited the risk that Penney could lose market share to competitors like Macy's Inc and Kohl's Corp.

Penney is due to begin remodeling its stores next month, with each hosting 100 boutiques by 2015. In May it said it was suspending its dividend.

J.C Penney shares closed down 2.2 percent at $20.30 on Wednesday. They have declined 53 percent since hitting a 52 week high in early February.