JC Penney (JCP) released its fiscal third-quarter earnings report on Friday, showing a lower than expected losses, sending its share prices soaring nearly 7%.

Total net sales for JC Penney decreased by 10.1% to $2.38 billion vs. $2.65 billion for Q3 2018. Comparable store sales for the company decreased 9.3% over the previous year with adjusted comparable store sales decreasing 6.6%.

The retailer also saw its cost of goods sold rate improve by 350 basis points, with inventory declining by 9% to $2.93 billion. Cost of goods sold was $1.54 billion or 64.6% of the company’s sales, down from the $1.81 billion in the same period last year.

JC Penney said the cost of goods sold rate improvement was based on an increase in-store and online selling margins as well as the exit from the major appliance and in-store furniture business earlier in the year.

JC Penney also reduced its SG&A expenses to $854 million, down from $883 million in Q3 2018. The reduction was driven by lower advertising and reduced store expenses. Net loss for the company was $93 million, an improvement from the $151 million in third quarter of 2018.

The company said it is in a "strong liquidity position" with approximately $1.7 billion, with expectations for liquidity to be at least $1.5 billion for the rest of the year. Credit income was $116 million, compared to $80 million for same quarter last year, and cash and cash equivalents were $157 million, a decrease of $18 million compared to the same time last year.

Outlook for the company has been updated by JC Penney, with comparable sales anticipated to be in the range of 7 to 8%. The company expects its cost of goods sold, as a rate of net sales, to decrease 150 to 200 basis points over the year previous and adjusted EBITDA to exceed $475 million. JC Penney also said it expects to have positive free cash flow.

“The past quarter was an exciting and energizing time at JCPenney as we made significant progress on our efforts to return JCPenney to sustainable, profitable growth,” said Jill Soltau, chief executive officer of JCPenney.

“We are beginning to see results – both in our numbers and how we operate as a business – from the early implementation of our Plan for Renewal, which is focused on driving traffic, offering compelling merchandise, providing an engaging experience, fueling growth, and building a results-minded culture.

“Going forward, I am confident that delivering our strategy, coupled with our ongoing discipline and commitment to improving the foundational elements of our business, will return JCPenney to its rightful place in the retail industry,” she added.

Shares of JC Penney stock were up 6.8181% as of 10:43 a.m. EST on Friday.

jcpenney People exit from JCPenny store at Herald Square on Nov. 25, 2016 in New York. Photo: KENA BETANCUR/AFP/Getty Images