What: Online jewelry retailer Blue Nile's (NASDAQ:NILE) stock rose by 10% in June, according to S&P Capital IQ data. However, the pop still left shares 16% below where they started 2015. The stock is down by one-third over the last five years.

NILE Chart

NILE data by YCharts

So what: Rather than a reaction to any business news, June's bounce seemed to be driven by a more attractive stock valuation. Shares in late May dipped to below 33 times profit, which marked one of the retailer's cheapest price-to-earnings ratios since 2009. 

Yes, Wall Street wasn't impressed with Blue Nile's first-quarter report, which showed surprisingly weak sales growth of just 2.6%. But there were a few positive signs in that announcement, too. For one, Blue Nile's profitability rose: Gross margin ticked up to 19% of sales from 18% a year ago, and that increasing efficiency helped it book an impressive 25% gain in earnings. It also reflects a shift in business tactics. Blue Nile held the line on prices in many of its popular products like wedding bands. "We were far less promotional overall," said CEO Harvey Kanter in a conference call with investors. "While that effort produced great margins, we will continue to seek the best balance between margin and revenue," he explained.

Now what: Kanter and his executive team believe Blue Nile can hit $112 million in revenue in the second quarter, a 5% gain over the prior-year period. Wall Street analysts forecast earnings of $0.20 per share, up 42%. 

Beyond those headline figures, investors will be eager to see how the company's international business fares, particularly in Asia. China is now Blue Nile's largest market outside of the United States. It is growing by 50% annually, and was the single biggest reason why international sales jumped 16% overall last quarter. 

Shareholders can't bank on that elevated growth rate applying for long. But, together with an improving profit picture, it does suggest investors might have become too pessimistic about this retailer's business. Blue Nile has multiple avenues to increase sales and profits over the next few years, even in the competitive online jewelry market.