Why Lululemon Athetica Inc. Stock Popped Today

What happened

Shares of lululemon athletica (NASDAQ: LULU) climbed 13.1% on Friday after the yoga apparel specialist announced stronger-than-expected fiscal second-quarter results.

More specifically, Lululemon's quarterly revenue climbed 25% year over year to $723.5 million, while earnings nearly doubled over the same year-ago period to $0.71 per share. Both ranges were well above Lululemon's latest guidance, provided in June, which called for revenue in the range of $660 million to $665 million, and earnings per share of $0.46 to $0.48.

So what

Lululemon's top line included a 20% increase in total comparable sales, or 19% at constant currencies, well above the high-single-digit growth on which its guidance was based. Within that figure, comparable-store sales climbed 10%, while direct-to-consumer net revenue soared 48%.

"We're pleased to see the great results of Q2 across all parts of our business now extending into the current quarter," said Lululemon Chief Operating Officer Stuart Haselden. "This ongoing success positions us to achieve our 2020 goals and beyond."

Now what

In the meantime, Lululemon expects fiscal third-quarter revenue ranging from $720 million to $730 million, assuming total comparable sales growth in the low teens. That should translate to earnings per share of $0.65 to $0.67. By comparison -- and though we don't usually pay close attention to Wall Street's demands -- consensus estimates predicted earnings of $0.64 per share on revenue of only $708.6 million.

As such, Lululemon also raised its full-year guidance to call for 2018 revenue of $3.185 billion to $3.235 billion (up from $3.04 billion to $3.075 billion), and for earnings per share of $3.45 to $3.53 (up from its prior range of $3.10 to $3.18).

Even with shares up more than 70% year to date leading into this report, it's hardly surprising to see shares soaring today given the gravity of Lululemon's beat and raise.

10 stocks we like better than Lululemon AthleticaWhen 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 quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Lululemon Athletica 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 6, 2018

Steve Symington owns shares of Lululemon Athletica. The Motley Fool recommends Lululemon Athletica. The Motley Fool has a disclosure policy.