J.C. Penny reports a 9.1% drop in third-quarter profit

This is from Marketwatch:

NEW YORK (MarketWatch) -- J.C. Penney Co. reported Thursday a 9.1% drop in third-quarter profit, hurt by sweeping discounts to clear unsold merchandise. The department-store operator cut forecasts for the fourth quarter and the full year, citing macroeconomic concerns.

It marked another ominous sign for the retail sector's prospects as the holiday shopping season -- the biggest selling period for retailers -- approaches. Discounts and promotions are expected to be the theme this year as store receipts were recently forecast by an industry group as likely to be the worst in five years.

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Like many other retailers, Plano, Texas-based J.C. Penney's sales have been hurt by unseasonably warm weather and softer consumer spending, forcing it to lower prices more than expected to clear increased stocks of goods.

Against a backdrop of record-high oil prices and slowing housing and credit markets that have hurt mid-priced shoppers, the retailer lowered salary expenses, is reducing the size of its Big Book catalog and will keep a tight rein on inventory and other expenses heading into the holiday season.

Again, it is the increasing oil and gas prices, the subprime mortgage mess and home foreclosures, and the tightening credit markets that are spooking the American consumers, resulting in their cutting back on holiday shopping. So J.C. Penny's profits are being hurt by the big discount price cuts just to get the inventory off their store shelves. More to come as Christmas approaches.