This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

New York • Beware the underdog.

J.C. Penney Co. delivered strong fourth-quarter results, wrapping up a year when it stole market share over rivals.

The company, based in Plano, Texas, also offered an upbeat sales outlook, as efforts to spruce up its merchandise is winning over shoppers. Investors cheered, pushing shares up 12 percent by midday Friday.

The results were a bright spot in an otherwise dismal holiday quarter, where department store rivals like Macy's and Kohl's offered disappointing outlooks after struggling with weak sales.

It was a reversal of fortunes this critical holiday season for Penney, which is clawing its way back from a failed reinvention plan that caused catastrophic losses and plunging sales.

And the latest performance offers encouraging news that a transformation by CEO Marvin Ellison is in the works. Ellison officially took the helm in August 2015, after a nine-month transition period working closely with Myron Ullman, who returned to the top CEO spot in April 2013 when the board fired Ron Johnson. Johnson got rid of most promotions and replaced with it everyday low prices and swapped basics for trendy assortments in a bid to grab higher-income, younger shoppers.

Ullman stabilized the business by bringing back discounts and restoring store label merchandise, but Ellison's goal is to expand sales and remake the company to be more nimble.

The company is playing catch up in e-commerce, including rolling out services that allow online shoppers to pick up at the stores. It's also using its store label offerings as a key weapon to fight against pricing pressures from online rivals. It's also testing appliances and just rolled out a new campaign called "Get Your Penney's Worth," which will offer certain store label items for pennies. Ellison noted that the Penney campaign should help to broaden its demographic, which centers on middle-income shoppers with an annual average household income of $60,000.

J.C. Penney still has a long way to go before it can claim a full recovery. The company posted annual sales of $12.6 billion for the year ended Jan. 30, up 3 percent from the prior year. But that's still far below the nearly $18 billion in annual revenue once booked right before Johnson came to the helm in November 2011.

But Penney is making some good progress given a tough environment, particularly in department store arena, where shoppers are being selective.

Ellison told investors during a conference call Friday that it's evident that Penney gained market share in 2015.

"Our ability to gain share in a relatively flat to negative retail market is not accidental," he said. He also assured analysts that the company is testing different initiatives before rolling them out. Penney had learned painful lessons from Johnson who rolled out the bold pricing strategy without testing in the stores.

Ellison said the re-establishment of key private brands like St. John's Bay and Roy Velvet have helped win shoppers back. The company is also accelerating the rollout of shops within its stores devoted to the Sephora beauty brand. It added 28 last year for a total of more than 500 shops, a big chunk of the 800-store fleet. But this year, it plans to add 60.

Sephora was a top selling area for the holiday shopping season as well as handbags, home and furnishings and shoes.

Elllison noted all of its clothing businesses enjoyed positive results despite unseasonably warm weather that plagued many retailers including Macy's.

Penney posted a 4.1 percent increase in revenue at stores opened at least a year. That metric dropped 4.3 percent at Macy's. At Kohl's, the measure was just up 0.4 percent, while at upscale Nordstrom, the measure was down 3.2 percent.

Penney said it lost $131 million, or 43 cents per share, in the fourth-quarter. That compares with a loss of $35 million, or 11 cents per share. a year ago. But the results were weighed down by pension and restructuring costs.

Adjusted results amounted to a profit of 39 cents per share, which matched estimates from FactSet.

Revenue rose nearly 3 percent to $3.99 billion, and topped the $3.97 billion estimate from FactSet.

Penney said that it expects revenue at stores opened at least a year to rise anywhere from 3 percent to 4 percent, and that adjusted profits should be positive.

Penney's shares are well below the $43 it hit in February 2012 when enthusiasm for Johnson's makeover was high.