NEW YORK ( TheStreet) -- Is it possible that a turnaround is happening at J.C. Penney ( JCP)? The Plano, Texas-based department store said that October same-store sales rose 0.9%, up 490 basis points from September, and the first positive comps since December 2011. Sales on jcp.com jumped 37.6% in October from last year, "a continuation and acceleration of the positive trend in the company's online business," J.C. Penney said. The retailer added that customers are responding favorably to promotional events and improved inventory levels of familiar brands as "conversion" continued to improve in October compared to last year. Shares were rallying 5.8% to $8.15 in premarket trading on Thursday. "JCPenney has made significant progress in addressing the challenges it faces, and we believe the company is on the right track to return to long-term profitable growth," CEO Myron (Mike) Ullman III said in a statement. "We are proud of our October sales improvement, which we achieved despite the federal government shutdown and a challenging consumer environment. Not only did we deliver positive same store sales for the first time since December of 2011, we also saw significantly improved sales trends in home and men's apparel, as well as women's accessories." J.C. Penney continues to re-merchandise and reconfigure its home department both in stores and online. The changes are beginning to resonate, the company said, as its home division saw the largest percentage sales increase company-wide in October. Sales of home merchandise online were up more than 50% from last year and were almost half total online sales in October. The categories of women's, men's and children's apparel were also strong performers online during the month. The company also opened 30 new Sephora stores inside J.C. Penney locations in October, bringing the total to 446 locations. Still, the company cautioned that gross margin in the third quarter was hurt by lower clearance margins due to the overhang of inventory from the first two quarters of the year, higher levels of clearance units sold, as well as the company's transition back to a promotional pricing strategy. However, gross margin showed sequential improvement within the quarter, with October representing the highest margin levels of the quarter. J.C. Penney will report third-quarter earnings on Nov. 20. "The success we've had to date in reconnecting with our customers is energizing the teams throughout our organization, enabling us to achieve customer service scores that are at an all-time high for the company," Ullman said. "As we look ahead, we are fully prepared to execute our aggressive plans for the holidays, including opening at 8:00 pm on Thanksgiving Day. We will soon be unveiling new marketing to better communicate the unique value and stylish merchandise assortment we offer. We expect the holiday season to be extremely competitive, and we are ready to win." -- Written by Laurie Kulikowski in New York.