Shocker.

J.C. Penney Co. (JCP) - Get Report surged in early trading on Friday, Nov. 10, after the department store chain reported financial results for the third quarter that exceeded the expectations of Wall Street, itself and everyone else.

Shares leaped 47 cents, or 17.1%, to $3.22.

J.C. Penney said net sales decreased 1.8% year over year in the quarter ended Oct. 28 to $2.81 billion, but store traffic was up. Comparable sales increased 1.7%, while the negative change in net sales was smaller than expected, as analysts predicted $2.77 billion in net sales.

The positive comp sales, higher than the analyst consensus of a 0.5% rise, were the result of the retailer's "aggressive actions" to liquidate slow-moving inventory in women's apparel, CEO Marvin Ellison said in a statement. "Our growth strategies and new apparel initiatives led to sequential comp sales improvement in nearly all merchandise categories in the third quarter."

He continued, "While these actions had a negative short-term impact on profitability in the third quarter, we firmly believe it was the right decision for the company as we transition into the fourth quarter and fiscal 2018."

Appliances drove overall sales growth. The category increased 128% in sales in the third quarter, according to Ellison in the earnings call. Sales from home goods, footwear and bags, as well as the chain's Sephora sections, outperformed the total comp. In the third quarter, 38 new Sephora locations opened inside existing stores. Ellison projects that the new line, Fenty Beauty by Rihanna, will drive holiday sales.

J.C. Penney also beat the Street's predictions for earnings loss. The company posted a loss of 33 cents per share, compared with a 42-cent prediction for loss per share, according to Factset. The mitigated loss was driven by the uptick in sales, store closures and an update to the company's pension plan.

In addition to the nearly 140 stores it closed this year, Penney also cut selling, general and administrative expense spending, which dropped $48 million year over year to $840 million. These savings came from cuts in store controllable costs, marketing and corporate overhead, the company said.

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Ahead of the holiday season, J.C.Penney plans to focus on increasing revenue per customer by emphasizing its beauty offerings through Sephora, which is owned by LVMH Moët Hennessy Louis Vuitton S.E., as well as initiatives in the home category. Ellison also underscored JCPenney's omnichannel developments. 

"Today approximately 80% of the store's existing inventory is eligible for free same day pickup and over 90% of online purchases touch a physical store," he said in the earnings call. 

Barely two weeks after lowering its full fiscal 2017 guidance for comp sales to negative 1%, Penney once again lifted its forecast, predicting that comp sales would be flat at 0%. Full-year earnings are expected to stay the same as the previous forecast, between 2 and 8 cents.

Its third-quarter beat is much-needed relief for J.C. Penney, which had seen its stock lose more than 70% of its value so far this year. Ellison announced liquidation efforts on Oct. 27, sending shares plummeting 25% that day. He gave analysts and investors an update on these efforts Friday, setting the goal to infuse new items in women's apparel on as frequently as a weekly basis. 

"Look, we know we have work to do in our apparel categories, but we're making good progress," he said. "You're going to see more contemporary, more casual, more active categories in [women's apparel]."

Penney's results conclude a week of nail-biting financial results for the country's biggest department stores, including Kohl's Corp. (KSS) - Get Report , Macy's Inc. (M) - Get Report and Nordstrom Inc. (JWN) - Get Report , two of which posted negative comp sales. The other, Kohl's, barely saw an increase at 0.1%.

But one quarter of good traffic will not salvage Penney's declining health.

"Cost-cutting measures have been their sole respirator," said Ricardo Rubí, a retail marketing specialist and partner at consulting firm Simon-Kucher & Partners.

"It could keep on going like this for a couple of years, but at the end of the day, there probably won't be a big turnaround," he told TheStreet last month.

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