What happened

Shares of clothing retailer Guess? (NYSE:GES) jumped 17% as of 11:18 a.m. EDT on Thursday. The big move was because of an upbeat earnings report that featured better-than-expected results and a boost to guidance.

So what

Here's a look at the headline numbers that have traders feeling giddy on Thursday:

  • Revenue jumped just over 5% to $574 million. The gain was driven by double-digit growth in both Europe and Asia and offset by a decline in the Americas. This number came in ahead of management's guidance range.
  • GAAP profits fell 53% to $15.2 million However, this figure is misleading because the year-ago quarter included a $22.3 million investment gain.
  • On an adjusted basis, net income grew 30% to $16.1 million or $0.19 per share. That figure was far ahead of the $0.10 in adjusted profits that Wall Street had predicted.
  • Guess? opened four new stores in the Americas and closed 32 locations.

Turning to guidance here's what management had to say:

  • Revenue in the upcoming quarter is expected to grow between 4% and 6%. That should translate into adjusted earnings per share of $0.08 to $0.11.
  • Full fiscal-year revenue is expected to grow between 6% and 7.5%. That's a big increase from its prior range of 3.5% to 5% growth. Adjusted EPS was also raised and is now expected to land between $0.52 to $0.60. For perspective, Wall Street is currently expecting 3.3% sales growth and $0.40 in adjusted earnings for the full year.

Given the encouraging quarterly results and bullish guidance, it is easy to understand why shares are soaring today.

Woman with Guess shirt on wearing American flag

Image source: Guess?

Now what

Long term, Guess? investors have had to endure several rotten years in a row, so it is good to see that the company's key metrics are moving in the right direction. Furthermore, CEO Victor Herrero told investors that the company is making moves today to position itself for continued success.

This is truly an exciting time for Guess. We have now increased revenues for four consecutive quarters and we expect consolidated revenues to continue to increase despite store closures in North America. In Europe and Asia we have seen not only strong double digits growth for several consecutive quarters but also continuing margin expansion. We have achieved meaningful cost reductions, especially in our supply chain. We are accelerating the reduction of our footprint in the U.S., which currently represents less than 36% of our global sales. And finally we are significantly increasing the adjusted guidance for fiscal 2018 and are now expecting to grow top-line, adjusted operating margin and adjusted earnings per share compared to last year.

Will growth in Asia and Europe be enough to offset the weakness in the Americas over the long term? Only time will tell, but this earnings report should go a long way toward building Wall Street's confidence that this company is finally heading in the right direction.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool recommends Guess?. The Motley Fool has a disclosure policy.