Swedish fashion group H&M said sales of its summer collections had started well and it would open fewer stores this year than previously planned as it adapts to the online shift, boosting its shares by 10%.
H&M is the world's second-biggest fashion retailer after Zara owner Inditex.
It said that sales in June, the first month of its fiscal third quarter, were up 12%, beating analyst forecasts.
In the second quarter, sales had risen by 11%.
That is above the 10% rise Inditex reported for local-currency sales for the six weeks from the start of May.
H&M also said it was reducing the net number of new stores it plans to open in 2019 to around 130, down from 175 in its previous plans, as it invests more in its ecommerce offering.
The company maintained its capital expenditure forecast for the year as a whole.
Despite investing heavily in logistics, digital technology and store concepts, and reviewing its mix of stores and brands, H&M has struggled to convince investors it is back on track and its shares remain little above the 13-year lows seen in 2018.
H&M reported a pretax profit for the three months to the end of May, its fiscal second quarter, of 5.9 billion crowns ($640m), down from a year-ago 6.0 billion, slightly shy of analyst expectations.
The gross margin shrank 1%, in line with expectations.
H&M has seen profits shrink and inventories rise in recent years as its core budget brand has not kept up with the growth of ecommerce and tougher competition, and not reacted fast enough to demand swings.
Inventories kept growing in the quarter, by 11% to 40.4 billion crowns or 18% of sales at the end of the quarter.
However, H&M said the composition of the stock had kept improving.
Markdowns decreased for a third quarter in a rows and H&M said it expected them to fall by a further 1.5 percentage points in the third quarter.
