PLANO, Texas (AP) – J.C. Penney reported a narrower loss in its second quarter on stronger-than-expected sales as the department store chain continues to turn its business around.

Shares of the company rose in premarket trading.

The results, announced Friday, offer encouraging signs for the Plano, Texas-based retailer, which is trying to recover from a disastrous attempt to reinvent itself under former Apple executive Ron Johnson.

But it still faces big challenges ahead heading into the final months of the year amid an economy that is still tripping up the chain’s middle-income shoppers. Shoppers’ spending is also shifting away from department-store specialties such as clothing and more toward restaurants, autos and smartphones.

The figures were released a few weeks after Marvin Ellison, a former Home Depot executive, officially took over the reins as CEO from Myron Ullman, who became executive chairman of the board. Ullman came back to the helm in April 2013 after Johnson was pushed out. Ullman helped pick Ellison, and the two executives have been running the company together since November.

Under Ullman’s second tenure, Penney has been trying to stabilize the business by restoring frequent discounts and bringing back basic merchandise and popular store brands that Johnson eliminated.