What happened

Shares of GNC Holdings Inc. (NYSE:GNC) a specialty health retailer, are about 12.6% higher as of 11:55 a.m. EDT during Thursday's session. The company's second-quarter earnings release wasn't exactly glowing, but it did give investors a few reasons to smile.

So what 

Wall Street expected GNC Holdings to report earnings $0.03 lower than the $0.41 per share reported this morning. Although revenue fell 4.8% compared to the previous-year period, it looks like the steep losses experienced in the last half of 2016 have subsided. Total second-quarter revenue of about $641 million was just 0.6% lower than $645 million recorded during the first three months of the year.

Happy man, dressed in shirt and tie, in front of an upward-sloping chart.

Image source: Getty Images.

Management also highlighted some below-the-surface figures that suggest the company might be poised for a comeback. The company's myGNC Rewards loyalty program added roughly 2.3 million members, raising the total to 7.3 million at the end of June. Investors were also pleased with a big 12.3% year-to-year rise in total transactions recorded.

Now what

GNC Holdings was a bit late to the e-commerce party, and the previous paid membership-rewards program alienated all but the most die-hard fans. The rapid growth of its new, free-to-enroll program is certainly a step in the right direction, and investors will want to keep an eye open for continued membership growth in the quarters ahead.

Earlier this year GNC launched a storefront on Amazon.com, which "continues to exceed the Company's expectations." Exactly what those expectations were isn't perfectly clear, but I doubt it involved the year-to-year 12.1% decrease in average transaction amounts within U.S. company-owned stores reported during the first quarter and another 11.8% decrease in the second quarter.

It looks like the improved rewards program, online presence, and competitive pricing have stopped customers from completely shunning the brand. But it remains to be seen whether GNC can successfully transition to a higher-volume, lower-margin business model.

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