JC Penney announced on Tuesday that it will discontinue its 20 cents per share quarterly dividend.

On an annual basis, this will result in cash savings of approximately $175 million, which will be used to help fund the broad-based transformation plan that JC Penney announced in January, the company announced.

JC Penney's shares were down $4.20 to $29.19 in after-hours trading Tuesday.

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