J.C. Penney said same-store sales surged during the holiday shopping months of November and December due to strong demand for its private-label offerings and gift products and higher online sales.
The department store operator's shares rose 2.8 percent to $7.20 in premarket trading.
Same-store sales rose 3.9 percent in the last two months of the year, the company said.
J.C. Penney's strong results were in stark contrast to those of rival Macy's, which reported a 4.7 percent drop in comparable sales on Wednesday and said it would cut jobs and shut stores.
Macy's attributed 80 percent of the fall in sales to unusually warm weather and the rest to the strong dollar, which kept tourists from spending at its flagship stores in upscale locations in the United States.
"Despite unprecedented warm weather that significantly affected apparel sales across the company, our focus on private brands, enhanced omnichannel execution and compelling gift giving selection resulted in strong holiday sales," J.C. Penney Chief Executive Marvin Ellison said in a statement.
Ellison also attributed the strong sales to its online business, which posted record sales during the holiday season.
J.C. Penney also reaffirmed its full-year adjusted earnings target of $645 million before taxes on Thursday and the company said it planned to generate positive free cash flow in fiscal 2015.
Up to Wednesday's close of $7.00, J.C. Penney's shares had risen 7 percent in the past 12 months, compared with a nearly 1 percent drop in the S&P 500 index.
(Reporting by Siddharth Cavale in Bengaluru; Editing by Kirti Pandey and Saumyadeb Chakrabarty)