The shares of J C Penney are trading higher after releasing its second-quarter financial results that exceeded the estimates of Wall Street analysts.

J C Penney Q2 Financial Results Beat Estimates; Stock Rises

The stock price of the century-old retailer increased more than 7% to $8.65 per share at the time of this writing around 11:40 AM in New York.

J C Penney financial results

J C Penney reported $2.88 billion net revenue for the second quarter, higher than its $2.80 billion net revenue in the same period a year ago. Wall Street analysts expected the company to deliver $2.86 billion, according to data compiled by Thomson Reuters.

The company’s same-store sales increased 4.1% compared with the 3.9% growth estimated by analysts. Its gross margin climbed 100 basis points to 37% due to improvement in clearance and promotional selling margins.

J C Penney’s net loss declined from $172 million or $0.56 per share to $138 million or $0.45 per share in the second quarter. Analysts expected the company to report a loss of $0.48 per share.

The company’s EBITDA rose by $25 million to $115 million. On an adjusted basis, its EBITSa was $134 million.

Its SG&A expenses declined $63 million yo $901 million or 31.3% of sales, an improvement of 310 basis points. According to J C Penney the savings were primarily due to lower store controllable costs, advertising, and improved private label credit card revenue.

In a statement, J C Penney CEO Marvin Ellison said, “We are pleased to report another quarter of improved performance thanks to the commitment and diligence of the J C Penney team. Although we have significant work to do as a company to regain our status as a world-class retailer, I am pleased with the resilience and the efforts of our associates. I also remain confident in our ability to achieve the long-term financial targets we have laid out.”

J C Penney business outlook

For the full year 2015, J C Penney expected to achieve comparable store sales growth of around 4% to 5%. The company expected its gross margin to improve by 100 to 150 basis points.

J C Penney estimated that its SG&A expenses will decline approximately $120 million. The company expected to achieve around $620 million EBITDA and free cash flow to be breakeven.

During a conference call, Ellison said J C Penney will concentrate on further improving its private brands and increasing purchase levels of its customers. The company has approximately 87 million active customers. Additionally, J C Penney intends to boost its omnichannel marketing, combine e-commerce, mobile apps & other initiatives to its traditional brick-and-mortar stores.