What happened Shares of Michael Kors Holdings (NYSE: KORS) surged Tuesday morning after the luxury fashion giant posted a better-than-expected fiscal first-quarter 2018 earnings report, and lifted its full-year guidance. As of 12:50 p.m. EDT, the stock was up 21.6%. Image source: Michael Kors. So what The quarter, which ended July 1, was far from stellar, as comparable sales were down 5.9% (and 4.9% in constant currency), but results still blew past expectations. Revenue fell 3.9% to $952.4 million, compared to analysts' consensus estimate of $918.6 million, as strong performance in China, including the opening of 67 stores, helped offset lagging sales elsewhere. Earnings per share slipped from $0.90 to $0.80, but the result was still well ahead of both management's own guidance range of $0.60 to $0.64 and the analysts' consensus figure of $0.62. CEO John Idol said that better-than-expected comparable sales in North America and Europe drove the outperformance, but he emphasized that fiscal 2018 would still be a transition year. He also touted the recent acquisition of Jimmy Choo, saying the purchase will allow the company to form a "global luxury fashion group." Now what Michael Kors also lifted its full-year revenue outlook modestly from $4.25 billion to $4.275 billion, and said it sees comparable sales declining in the mid-single digits as opposed to a prior range of high-single digits. It also bumped up earnings per share expectations from a range of $3.57 to $3.67 to a range of $3.62 to $3.72. That guidance does not include the impact from the Jimmy Choo acquisition, which is expected to add $275 million in incremental revenue in the second half of the year and $570 million to $580 million next year. While it's certainly too early to declare Michael Kors' turnaround a success -- especially given that sales and profits are still falling -- the report and outlook offer some hope that the company can stabilize itself and grow profits again. 10 stocks we like better than Michael Kors HoldingsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Michael Kors Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of August 1, 2017Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Michael Kors Holdings. The Motley Fool has a disclosure policy.