(Reuters) - J.C. Penney Co Inc (JCP.N) reported a rise in comparable store sales for the second consecutive quarter, helped by demand for household goods and men's and women's clothing, sending the company's shares up more than 25 percent in after-hours trading.

Penney is undergoing a transformation as it tries to stanch losses and win back shoppers after a failed attempt to go up-market resulted in a 25 percent drop in sales in 2012.

Sales also declined in the first three quarters of 2013 before recovering during the holiday shopping season.

Comparable store sales rose 6.2 percent in the first quarter ended May 3, the company reported on Thursday.

"We expect to carry this momentum into the second quarter...", said Interim Chief Executive Mike Ullman, who returned to the helm last April after the ousting of Ron Johnson, the former Apple (AAPL.O) retail head who had led the retailer's failed attempt to attract higher-income customers.

Penney maintained its full-year forecast of "mid-single-digits" percentage growth in comparable store sales.

The company has been counting on its relaunched home goods section to drive growth, bringing back many of the more affordable, no-frills brands that Johnson had ditched.

The retailer has also reduced space given to trendier brands that the former CEO thought would bring in new shoppers as it intensifies its fight for market share against rivals such as Macy's Inc (M.N), Target Corp (TGT.N) and Kohl's Corp (KSS.N).

Penney's online business, which is also being revamped, reported a 25.7 percent rise in sales. No dollar figure was given.

Online sales reached a peak of $1.52 billion in 2011 and then fell by about a third in 2012, largely due to a lack of investment.

The company's net loss of $352 million, or $1.15 per share, compared with a loss of $348 million, or $1.58 per share, a year earlier. Excluding items, the loss was $1.14 per share, according to calculations by Thomson Reuters I/B/E/S. Analysts on average had expected a loss of $1.24 per share.

Total sales rose to $2.80 billion from $2.64 billion, beating the average estimate of $2.71 billion.

Gross margins also continued to improve, to 33.1 percent of sales, from 30.8 percent in the same quarter of 2013.

The company said it had increased its credit facility to $2.35 billion from $1.85 billion and extended its maturity to enhance its liquidity position.

"This financing is expected to provide better pricing terms and is expected to add $500 million of incremental liquidity during peak seasonal needs," Penney said.

Penney's shares were up 25.6 percent at $10.51 in after-hours trading. About 30 percent of the retailer's volatile stock is held by short-sellers betting that the shares will fall.