Don't look now, but Vipshop Holdings (NYSE:VIPS) is heating up again. The Chinese online discounter of brand-name apparel was one of early Thursday's biggest winners, opening 17% higher after posting better-than-expected financial results.

There's a lot to like in Vipshop's second-quarter report, but the biggest takeaway is that the stock -- after shedding more than half of its value -- is showing signs of life. Vipshop stock is now up 35% so far in 2019. The shares are easily beating the market, a notable achievement since so many of the market's other Chinese growth stocks remain tucked away in the doghouse. 

Vipshop's homepage showing a Forever 21 apparel promotion.

Image source: Vipshop Holdings.

Farewell to deceleration

Revenue rose 10% to $3.3 billion for the three months in June, and that is notable for more than just blasting past the analysts who were holding out for more flattish top-line growth. After 11 consecutive quarters of decelerating revenue gains -- slowing to 7% in its previous quarter -- Vipshop's top-line gains are finally starting to accelerate.

The news is even more encouraging at the other end of the income statement, as margins expanded to the point where reported net income rose 19% and adjusted earnings soared 84% to $154.8 million or $0.23 a share. Wall Street pros were targeting an adjusted profit of just $0.14 a share. Vipshop has consistently beaten analysts earnings estimates by a double-digit percentage margin over the past year, but this is its biggest beat in a long time.

Vipshop isn't struggling to find deal-hungry fashionistas, even in China's slowing economy. Its active customer count has grown 11% to 33.1 million over the past year, matching the gain in gross merchandise volume. The number of orders placed during the quarter rose 33%, so the value of each transaction is shrinking but it also means that the frequency of orders per active customer is also accelerating.

A lot of pressure points have been addressed in the second quarter. Improving margins, accelerating sales growth, and blowout earnings make Vipshop interesting to growth investors again. Vipshop's guidance isn't ideal. It is year-over-year revenue growth for the current quarter clocking in between flat to up by 5%. Even landing on the high end would be a return to decelerating revenue growth, but don't rip up your lottery tickets just yet. Vipshop's guidance is exactly what it was forecasting for the first and second quarters in its two previous financial outings, and we saw revenue growth come in 7% and 10% higher, respectively. 

Vipshop is back. Don't let the ho-hum guidance convince you otherwise. We may never see a repeat of the insane run between 2012 and 2014 when the stock more than doubled for three consecutive years, but with shoppers picking up the pace of their loyalty, profitability growing even faster than revenue, and a smart recent purchase of an outlet mall operator that should help expand its brand awareness and inventory outlets there is a lot to like in this stock that's still trading in the single digit.