J.C. Penney reported a 9 percent decline in third quarter earnings, pointing to a sharp decline in sales in September and October.

The department store operator slashed its profit forecast for the fourth quarter, raising questions about the health of the holiday shopping season.

"After the completion of a strong back-to-school season and a favorable response to our early fall merchandise, we were disappointed to see sales weaken dramatically in September and October," said Myron Ullman III, chief executive of J.C. Penney. "The combination of weak housing conditions, mortgage and credit market concerns, and rising fuel prices has clearly led to a challenging macroeconomic environment for consumers." He also cited warmer weather than usual in most of the United States.

For the quarter, the retailer earned $261 million, or $1.17 per share, compared with $287 million, or $1.26 per share, in the quarter a year earlier. Sales fell 1.1 percent, while sales at stores open at least a year slumped 3.5 percent.

"If you think about J.C. Penney, it really represents your typical average American shopper, and factors like the housing market, gas prices, along with abnormally warm weather, all that is going to impact the company,'' Steven Baumgarten, an analyst with PNC Wealth Management in Philadelphia, told Bloomberg News on November 5.