Farfetch Limited (NYSE:FTCH) shares surged more than 20% in pre-open Friday following the company’s reported Q1 results.

The company reported a loss per share of $0.16 but better than the consensus for a loss of $0.39.

Revenue increased 8.1% year-over-year (up 12% at constant currency) to $556.4 million, beating the consensus estimate of $515.51M, driven by a 6.5% increase in Digital Platform revenue, a 13.9% increase in Brand Platform revenue, as well as a 9.6% increase in In-Store revenue.

Q1 gross merchandise value (GMV) grew 0.1% year-over-year (up 4% at constant currency) to $931.7M.

“Our sequential improvement in GMV growth in the US and China, our two largest markets, as well as in orders across the Farfetch Marketplace, indicate the strength and resilience of our core business,” said CEO José Neves.

The company provided its full 2023 year outlook, expecting group GMV of approximately $4.9 billion, and an adjusted EBITDA margin of 1%-3%.

BTIG analysts said positive China comments are helping “shares climb out of the penalty box.”

“We saw the biggest risks to the quarter — and the year, for that matter — being margins and China, and FTCH delivered on both counts. Trading at just 7x 2025 EBITDA, we think FTCH doesn’t have to beat numbers so much as convince investors its 2025 targets are attainable and these results should help bolster conviction. Maintain BUY,” they wrote in a note.

BofA analysts said Q1 was likely an inflection point for Farfetch.

“Farfetch is giving the market a reason to revaluate the bull thesis on the shares: 2023 is the year of execution for the group, and the strong 1Q23 results are a step in the right direction in our view,” the analysts said.

“Farfetch GMV growth, profit margins and cash generation are all at an inflection point, while the fundamental thesis that Farfetch is best positioned to win the online luxury market keeps gaining ground. Reiterate Buy.”