On Wednesday, the discount retail chain reported an earnings beat, shocking Wall Street analysts. The company reported adjusted earnings per share of $0.56, significantly beating the consensus estimate of just $0.30 per share. And markets rejoiced on the news: Kohl’s share prices are up nearly 20% on Wednesday.

“We’re surprised and encouraged by the magnitude of the raise, especially considering higher tariff rates for proprietary brands,” read an analyst note from investment firm Baird that was shared with Fortune.

The stronger than expected Q2 earnings report comes on the heels of a tumultuous year for Kohl’s. After just 100 days on the job, CEO Ashley Buchanan was fired from his post for violating Kohl’s policies by directing the company to conduct business with a vendor Buchanan had a personal relationship with, under “highly unusual terms” that were favorable to the vendor. Following an investigation conducted by outside counsel, Buchanan was let go for “undisclosed conflicts of interest.” Michael Bender, who was on the company’s board of directors since July 2019 and served as chair, was tapped to be interim CEO.

While Kohl’s beat Wall Street expectations, the discount retailer still reported a 5.1% decrease in net sales and a 4.2% drop in comparable sales. Still, it’s a brighter picture than many expected for Kohl’s, which has also seen corporate layoffs and store closures in the past year or so.

“Although we are encouraged by our second-quarter results and the improved sales trend we saw throughout the quarter, we also recognize that consumers continue to be pressured and are being choiceful with their purchases,” Bender said during Wednesday’s earnings call. 

Still, discount retailers like Kohl’s are tending to perform at least a little better than other retailers during this current period of uncertainty marked by tariffs and inflation. Although Kohl’s is sometimes the butt of jokes on social media, “Kohl’s Cash” and other discounts at the retailer have proved to be a boon for business.

While lower- to middle-income customers remain the most challenged, higher-income customers have been more resilient, Bender said. 

“Several of our key initiatives are focused on delivering greater value to these customers through investing in our proprietary brands and adding more coupon-eligible brands,” Bender said.

Toward the end of Q1, Kohl’s made more in-store brands eligible for coupons, which “generated an immediate positive response in our digital channel, where pricing transparency plays a significant role in customer decision-making,” Bender said. “As the quarter progressed, we saw the performance improve in our stores as we increased investment in in store signage and marketing.”

That could be a telling sign customers are continuing to chase deals as they watch other stores raise prices owing to inflation and tariffs. To be sure, many middle-income customers have also “traded down” to more value-focused brands, so Kohl’s will need to continue offering coupon-friendly brands and items to stay afloat. Baird says potential risks for Kohl’s include “choppy” consumer-spending trends, a highly competitive promotional space, weather, and other economic factors.

Kohl’s comeback may also be the result of continued growth in its jewelry business, further investment in women’s clothing, and its partnership with Sephora. Bender said more than one-third of Sephora shoppers are exploring other areas of Kohl’s stores.

Jewelry and women’s clothing had been a sore spot for Kohl’s after Buchanan’s predecessor, Tom Kingsbury, had opted for Kohl’s to carry less inventory (like fine jewelry and women’s petite sizing), which ultimately hurt business. Kingsbury even admitted his choice to do so was “shortsighted.”