J.C. Penney posted better-than-expected same-store sales growth for the third quarter on Wednesday.
The retailer said comparable-store sales grew by 6.4 percent, while analysts polled by FactSet expected a 5.7 percent increase.
CEO Marvin Ellison said third-quarter gross margins and earnings performance "exceeded our expectations."
The company is scheduled to report full third-quarter results Friday before the bell. In early trading Wednesday, its share price was down more than 1½ percent.
Also Wednesday, Macy's posted disappointing earnings and revenue for the third quarter. It cited a slowdown in visits by international tourists who frequent many big-city Macy's locations, and warmer weather in the Northeast that's curtailing sales of winter apparel.
The news came as J.C. Penney announced it had settled a false advertising class-action lawsuit in California for $50 million, pending court approval.
"While we are confident of our position, resolving this litigation removes any uncertainty and risk, which we believe is in the best interest of our shareholders," Ellison said.
Plaintiffs will have the option of selecting a cash payment or store credit, J.C. Penney said.
The amount paid to each plaintiff will depend on how much money they spend during the class period, the retailer said.
The lawsuit, Cynthia E. Spann v. J.C. Penney Corporation Inc., was filed in 2012.