(Reuters) - J.C. Penney Co Inc JCP.N on Friday reported a smaller-than-expected quarterly loss as it sold more diamond jewelry and denim clothing, results Chief Executive Jill Soltau said showed efforts to revive sales and profits at the department store are taking hold.

Shares of the Plano, Texas-based company were up nearly 7.3% at $1.18.

The 117-year-old retailer, one of the worst-hit by the surge in online shopping in the past decade, has worked hard to attract more shoppers. In August, it partnered with resale clothing company thredUP, adding second-hand women’s clothing and handbags to its merchandising mix.

It is also testing a new store format to win over customers with everything from a yoga studio, a videogame lounge and lifestyle workshops.

Such efforts are a part of Soltau's turnaround strategy, aimed at reassuring investors it can lure shoppers back into stores amid fierce competition from online giants like Amazon.com Inc AMZN.O and discount retailers like TJX Cos Inc's TJX.N Marshalls and T.J. Maxx chains.

“We are beginning to see results – both in our numbers and how we operate as a business,” Soltau said in a statement on Friday.

Rivals, including Macy's M.N and Nordstrom Inc JWN.N, are also looking to woo shoppers with cafes, donut shops, fine-dining restaurants and full bars with Instagrammable views.

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Soltau, hired late last year from craft and fabrics seller Jo-Ann Stores, is attempting to restore Penney’s roots as a retailer of mid-priced apparel for middle-class families after years of falling sales and strained cash flow.

Earlier this year, Soltau chose to stop selling major appliances and limit furniture offerings and has worked to reduce inventory, lower ad spend and close underperforming outlets.

“We are re-establishing and rebuilding J.C. Penney to be around for the next 117 years,” Soltau said.

Chief Financial Officer Bill Wafford on an earnings call highlighted the success of Penney's higher-margin fine jewelry category, footwear, and men's and women's apparel, with denim including Levi's LEVI.N selling well.

Even so, analysts said there’s still a lot of work to be done to repair the brand.

“The company still needs to show a path of sustained profitability, comparable store sales momentum and gross margin improvement to gain investor confidence,” said CFRA analyst Camilla Yanushevsky.

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As recently as Sept. 2016, Penney’s stock was trading around $10 a share, but hit a record low of 53 cents this year.

Excluding one-time items, Penney reported a loss of 30 cents per share, narrower than the average analyst estimate of a 55-cent loss. Total revenue fell 8.5% to $2.5 billion.

The company said it expects adjusted earnings before interest, tax, depreciation and amortization for the year to exceed $475 million, above its prior outlook of $440 million to $475 million.

It maintained its full-year forecast for comparable store sales.

Sales at stores open for more than a year fell 9.3%, compared with expectations of a 7.74% slide, according to data from IBES Refinitiv.