JCPenney has reported lower third-quarter sales as tariff-related costs weighed on profits, although it said its value strategy and digital investments helped offset some of the impact.

The company’s sales dropped 4.6 per cent to $1.25 billion in the quarter, while total revenue declined 4.4 per cent to $1.31 billion.

At the same time, operating loss widened to $62 million from $52 million a year earlier, although its net loss narrowed slightly to $65 million from $69 million.

Among merchandise categories, the company says its Active category delivered the strongest growth, supported by Nike and NCAA fleece.

The retailer ended the quarter with no long-term debt, compared with $468 million a year earlier, reducing net interest expense to $2 million from $15 million.

Despite signs of operational improvement, Neil Saunders, MD at GlobalData, said JCPenney continues to lag the broader retail market.

“Consumer spending was robust over the third quarter, and JCPenney hasn’t capitalized on it,” Saunders said.

“That signals that there is a lot more to do in both rebuilding the customer proposition and trying to make JCP more of a destination.”

• Further reading: JCPenney’s quarterly loss widens as sales fall.