Ron Johnson

J.C. Penney's quarterly results show turnaround gaining traction

J.C. Penney's turnaround is gaining traction.

The department store chain said Friday that its losses narrowed in the second quarter on better-than-expected sales, fueled by men's clothing, fine jewelry and the beauty brand Sephora. And a key revenue measure rose for the third straight quarter.

"Although there is much work to do … it's clear that when we execute well, we can deliver profitable sales and take market share," said Marvin Ellison, a former Home Depot executive who took over as CEO on Aug. 1 and presided over his first earnings call for Penney.

The results offer encouraging signs for the Plano, Texas-based retailer, which is more than two...