99 Cents Only Stores sales rose modestly in its fiscal third quarter, but the retailer said Wednesday that cost-cutting enabled it to nearly double profits.

After the markets closed Wednesday, the Commerce discount chain reported net income of $24.5 million (35 cents per share) for the quarter ended Dec. 26, compared with income of $12.5 million (18 cents) a year earlier. Sales rose 2 percent to $359 million, with sales at stores outside Texas up 4 percent.

Analysts surveyed by Thomson Reuters on average expected the company to earn 25 cents per share on sales of more than $360 million.

Shares on Thursday closed up $1.90 cents, or 15 percent, to $15.27 on the Nasdaq, topping the list of biggest percentage price gainers on the exchange.

99 Cents Only, which has most of its 272 stores in California, said distribution and transportation costs dropped because of “labor efficiencies” and lower fuel costs. Lower consulting and professional fees enabled overhead costs to drop to 30.4 percent of sales, compared with 33.4 percent a year ago.

“The results from our long-term operational improvement initiatives have substantially exceeded our original goal set in February 2008,” said Chief Executive Eric Schiffer in a press release. “We (also) have made significant improvements in our operating income in all regions, including Texas.”

The company expects sales at stores open at least one year to grow in the low single digits in its fourth quarter.