NEW YORK (Reuters) - J.C. Penney Co Inc's (JCP.N: Quote, Profile, Research) operating income is expected to fall this year and the retailer may announce more plans to reduce store openings as it reacts to a "dramatic decline" in the overall level of consumer demand, its chief financial officer said on Wednesday.

CFO Robert Cavanaugh, speaking at the retailer's analyst meeting, also said Penney's gross margins will be under pressure this year and said he was not prepared to give a specific timeline for reaching the company's long-range growth targets that it outlined last year.

His comments came after Chief Executive Officer Myron "Mike" Ullman said earlier in the day that he would not provide annual financial forecasts because he did not have enough "visibility" to give a meaningful outlook.

Despite the difficult environment, Penney's management team intends to remain aggressive in introducing new brands to gain market share in the tough environment.

"Our growth initiatives, though moderated somewhat ... are designed to accelerate both comparable store and total sales growth, and increase share of market," Cavanaugh said, which will position the company "to resume a higher level of earnings growth once the environment improves."

The shares of the mid-tier department store operator fell $1.34, or 3.4 percent, to $38.19 in New York Stock Exchange trading.

UNPREDICTABLE ENVIRONMENT

At its analyst meeting last year, Penney outlined an aggressive 2007-2011 growth plan that included opening 250 new stores over the next five years and forecast a 16 percent compound annual growth rate in earnings per share for 2008- 2011.

But since it introduced that plan, the retailer's sales have taken a hit as its middle-income shoppers contend with higher food and energy costs, a deteriorating housing market, a weakening job market and a credit crunch.