Why lululemon athletica inc. Stock Rose 23.6% in June

What happened

Shares of lululemon athletica inc. (NASDAQ: LULU) climbed 23.6% in the month of June, according to data provided by S&P Global Market Intelligence, after the yoga apparel specialist announced strong first-quarter 2017 results. Lululemon also extended its gains amid continued acquisition rumors.

So what

The stock started the month strong, popping nearly 13% on June 2, 2017, following its formal earnings announcement. In it, the company confirmed that quarterly revenue had climbed 5% year over year to $520.3 million, while adjusted net income rose 8.3% to $44.3 million, or $0.32 per share. By comparison, investors were anticipating lower revenue of $514 million and adjusted earnings of only $0.28 per share.

If that weren't enough, lululemon also announced plans to restructure its kid-centric ivivva business. More specifically, lululemon will close around 40 of its 55 ivivva stores, as well as all of its ivivva-branded showrooms, and will convert around half the remaining stores to its flagship lululemon concept. In the end, ivivva will function primarily as an online brand in the promising e-commerce space.

Now what

As a result, lululemon reduced its full-year 2017 revenue guidance to a range of $2.53 billion to $2.58 billion (down from $2.55 billion to $2.6 billion previously) -- an understandable development given the ivivva store closures. But lululemon also simultaneously increased its guidance for full-year earnings per share to be in the range of $2.28 to $2.38 (up from $2.26 to $2.36 previously).

In addition, shares continued to rise late in the month following speculation that lululemon could be taken private, according to one analyst speaking with TheStreet, at between $70 and $85 per share -- a reasonable premium to Monday's closing price of around $60 per share. Of course, such speculation is nothing new for lululemon, and hardly guarantees such a deal will materialize. But for now, if lululemon's latest quarter is any indication, investors should be more than pleased with its position going forward.

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 tripled 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 June 5, 2017

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