Shares of Quiksilver Inc rose more than 12 percent on Friday, a day after the clothes retailer posted results that beat Wall Street expectations, buoyed by strong domestic sales.

Quiksilver

The Huntington Beach, California-based company was the third-biggest gainer on the New York Stock Exchange on Friday, even as the bigger S&P Retail Index .RLX was down 2 percent in morning trade.

Quiksilver, which makes clothes inspired by surfing and other action sports, had seen sales weaken in the U.S. and Europe, its two key markets. But a turnaround has made analysts positive about its prospects.

"Perhaps the most encouraging data point was an accelerating 23 percent U.S. comparable sales growth against tougher sequential comparisons," Jefferies analyst TaposhBari wrote in a note.

The analyst, who holds a "buy" rating on the stock, said sales at the company is likely at an inflection point, which could trigger an upgrade cycle on the stock.

"Going forward, we are modeling gross margins to be down in the second half of the year, but see an improving European business, favorable FX currents and continued retail outperformance providing an upward bias to gross margins," analyst Bari said.

Quiksilver shares were trading at $4.94 around midday on the New York Stock Exchange.

(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Joyjeet Das)