Shares of Guess Inc. jumped last week after first quarter results beat expectations. But analysts said the company still has a long way to go to reverse a two-year slide.

The L.A. apparel company on May 30 reported first quarter net income of $9.9 million (12 cents a share), 63 percent lower than in the same period the prior year. Quarterly revenue reached $549 million. Though well below the year-earlier earnings, the results were higher than the projected 8 cents a share expected by analysts surveyed by Thomson Reuters Ibes.

Investors cheered the news as a sign that the company’s turnaround efforts were working. Shares closed up nearly 7 percent to $31.09 for the week ending June 5, making it one of the biggest gainers on the LABJ Stock Index. (See page 56).

“It’s a step in the right direction,” said Erinn Murphy, an analyst in the Houston office of Minneapolis-based Piper Jaffray Cos. “They’re working diligently to stop the bleeding.”

Guess’s stock remains well below where it was in 2011, when it was trading for more than $47. The company had enjoyed rapid growth following the downturn, driven by expansion in Europe, where sales roughly doubled to more than $1 billion between 2007 and 2011.

But the company was hit hard in the summer of 2011 by the economic crisis in Europe, as well as a poorly received move to go more upscale in North America.

“They’ve had some challenges in their businesses, especially in Europe, and they got off track in terms of certain parts of their product line,” said Jeff Van Sinderen at Westwood’s B. Riley & Co. “Now it’s really a turnaround situation.”

Since then, the company has introduced a lower-priced, $79 jeans line and cut costs. The result has been a slowdown in the company’s year-over-year sales drop in North America and the better than expected earnings in the most recent quarter.

Murphy said success of a turnaround is contingent on a larger economic rebound in Europe. Nearly 40 percent of its sales are in Europe, concentrated in struggling southern countries such as Italy that have been hit particularly hard.

“This is a truly strong brand with global appeal,” she said. “But the biggest thing going against them is that 38 percent of their business is in a very tough market, and we have not seen signs of stabilization there.”