SHARECOMMENTMORE

NEW YORK - J.C. Penney said Tuesday that a key revenue measure rose 2% during its November-January quarter, which includes the crucial holiday shopping season. It's the first time since early 2011 that J.C. Penney has recorded a quarterly sales gain.

On the face of it, it's encouraging news for the department store chain, whose shares have been battered by investors' pessimism that it can recover from a steep sales slump.

But investors aren't impressed: The company's stock is down 5.5% in mid-day trading, to $5.36 a share.

Under former CEO Ron Johnson, who was ousted last April after 17 months on the job, Penney's sales plummeted and it recorded massive losses. The Plano, Texas-based company then brought back Mike Ullman as CEO. He is trying to attract shoppers by restoring the frequent sales events and basic merchandise ditched by Johnson in his quest to target younger, wealthier consumers.

Shares have lost about 86% of their value since early February 2012 when enthusiasm was high over Johnson's transformation plan.

"While 2013 brought a lot of change and challenges to J.C. Penney, the steady improvements in our business show that the company's turnaround is on track," said Ullman in a statement Tuesday. He noted that the sales measure, revenue at stores opened at least a year, rose in the fiscal fourth quarter despite bad weather in many parts of the U.S.

During the nine-week holiday period in November and December, the sales metric rose 3.1% at Penney. That's important because the holiday season can account for 20% to 40% of a retailer's annual sales.

But this winter, many retailers discounted heavily to bring in shoppers in a slow economic recovery, hurting profits. It's not clear how much the holiday sales gains at Penney came at the expense of profits. Investors will find out when the company reports its final fourth-quarter results, on Feb. 26.

The company's most recent monthly sales figures have shown some improvement after a long decline. Sales at stores open at least a year edged up 0.9% in October, the first monthly increase since December 2011. The metric jumped 10.1% in November.

But the company has not broken out December sales, saying in early January only that it was "pleased with its performance for the holiday period," and that the holiday season showed "continued progress in its turnaround efforts."

At the time, it backed its outlook for the fourth quarter and said the sales measure and profit margins will likely improve from month to month.

Penney is also cutting costs to get back to profitability. The company announced in mid-January that it will cut 2,000 jobs and close 33 stores to help it save about $65 million annually. Penney has 116,000 staffers and operates more than 1,100 stores.

SHARECOMMENTMORE