J.C. Penney Co. Inc. (NYSE: JCP) reported third-quarter 2013 results before markets opened Wednesday morning. The venerable retailer reported an adjusted diluted earnings per share (EPS) loss of $1.81 and $2.78 billion in revenues. In the same period a year ago, the company reported an EPS loss of $0.93 on revenue of $2.93 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for an EPS loss of $1.72 and $2.8 billion in revenue.

On a GAAP basis, J.C. Penney posted an EPS loss of $1.94, compared with a loss of $0.56 in the same period a year ago.

Concerning its outlook for the rest of the fiscal year, J.C. Penney said that same-store sales and gross margins “are expected to improve sequentially and year over year.” That does not mean that same-store sales will be positive for the quarter. Same-store sales in the third quarter were down 4.8%, which was an improvement from the drop of 11.9% from a year ago. Same-store sales were up 0.9% in October, the first gain the company has seen in two years.

The company’s CEO said:

Our strategies to reconnect with customers are beginning to take hold, and this became increasingly clear as the quarter progressed. This is the result of the tremendous efforts of the associates across our Company to restore the merchandise customers want and deliver an unmatched shopping experience. We are proud of the Company’s October sales performance, encouraged by the early weeks of November, and believe we are making strides toward a path to long-term profitable growth.

The store expects to end the year with $2 billion in liquidity and $2.85 billion inventory. Somehow, having $2 billion more to lose does not seem like a positive, but maybe that is just old-fashioned thinking.

At the end of the second quarter the consensus estimate for J.C. Penney’s third-quarter EPS loss was $0.80. That estimate more than doubled and J.C. Penney still managed to lose more money than expected. There is really no reason to believe that J.C. Penney and its new/old CEO have a plan that accomplish more than staving off the inevitable for a few more quarters.

The company also noted that gross margin for the third quarter fell from 32.5% a year ago to 29.5% this year, and attributed that to blowing out the old inventory at rock-bottom prices. The report on margin concludes: “Notwithstanding, gross margin did improve sequentially throughout the quarter.” Does that mean it got better week by week? Gross margin in the prior quarter was 29.6%, a drop from 33.5% in the year-ago second quarter. Pretty soon the company is going to have to own up to the fact that it is doing nothing more than standing still and losing more money.

Investors love what they heard this morning. Shares were up 5.4% in premarket trading, at $9.18 in a 52-week range of $6.24 to $23.10. Thomson Reuters had a consensus analyst price target of around $9.80 before the results were announced.

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