The stock price of J.C. Penney Company, Inc. (NYSE:JCP) surged by 4% to $8.01 a share after Chief Executive Officer Mike Ullman said the company is in an early stage of recovery and it has enough cash to last until the end of the year.

J.C. Penney

The embattled century-old department store chain suffered a steep decline after analysts expressed concerns it is burning cash faster than expected, and it could face liquidity problems and it might need to borrow more money to keep its daily operations going.

J.C. Penney decided to sell equity to raise funds

In response to the growing concerns on its liquidity, J.C. Penney Company, Inc. (NYSE:JCP) decided to sell equity to raise funds. The retailer offered 84 million of its common shares for $9.65 per share to raise $932 million.

On Tuesday, J.C. Penney Company, Inc. (NYSE:JCP) reported the completion of its 84 million shares public offering. According to the company, the equity sale generated approximately $785 million in net cash proceeds and its estimated liquidity is more than $2 billion until the end of the year. The company previously disclosed that it had $1.3 billion liquidity including undrawn portion of its credit facility.

In a statement, Ullman said the main priority J.C. Penney Company, Inc. (NYSE:JCP) has is to reconnect and get its customers back to its stores. According to Ullman, “Over the last six months, we have made significant strides and are now seeing positive signs in many important areas of the business, in spite of what continues to be a difficult environment for consumers and retailers in general.  While pleased with the improving trends and more predictable performance, we are still in the early stages of the turnaround and will maintain a relentless focus on achieving our long-term goals for the benefit of our customers, associates and shareholders.”

J.C. Penney said its September sales improved

J.C. Penney Company, Inc. (NYSE:JCP) said its September sales improved by 580 basis points compared with its sales in August, but 4% lower than its sales in the same month last year. According to the company, its sales online ( continue to record double-digit gains, up 18.6% in the third quarter or 25.3% compared with the same period a year ago. The department store chain also reported improvement in women’s and men’s apparel, fine jewelry, and women’s accessories.

In addition, J.C. Penney Company, Inc. (NYSE:JCP) admitted experiencing challenges in getting its Home department up and running. The company said it has reopened “all but a handful” of its 505 new Home departments, and it is working to aggressively to create a more balanced assortment of modern and traditional home furnishings.

On the other hand, analysts at Citi Research maintained their Sell rating for shares of J.C. Penney Company, Inc. (NYSE:JCP) and a price target of $7 per share. The analysts said they continue to believe that the company could suffer an SSS decline of -7.5% in the third quarter of 2013, but it might achieve substantial SSS recovery +7.5% in 2014, and +5% in 2015.