Why lululemon athletica Stock Popped Today

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What happened

Shares of lululemon athletica (NASDAQ: LULU)were up 16.6% as of 12:30 p.m. EST Thursday after the yoga apparel specialist released stronger-than-expected fiscal third-quarter 2016 results and a big new stock repurchase program.

So what

Quarterly revenue climbed 13% year over year, to $544.4 million, including 16% growth in direct-to-consumer revenue, to $104 million. Total comparable store sales (including direct to consumer) rose 7%, while comparable-store sales increased 4%. On the bottom line, net income grew 28.5% year over year, to $68.3 million, and net income per share increased 31.6%, to $0.50.

For perspective, Lululemon's revenue came in at the high end of its guidance, which called for $535 million to $545 million, assuming a mid-single-digit increase in total comparable sales. And net income was well above the company's outlook, which called for diluted earnings per share of $0.42 to $0.44.

Lululemon CEO Laurent Potdevin added, "Our third quarter results demonstrated strong execution across all areas of our business as we delivered continued top-line momentum, outperformed in gross margin and inflected meaningfully in EPS.This success is a result of our team's ongoing effort and commitment to delivering on our long term strategies."

Lululemon also announced its board has approved a new $100 million stock repurchase program, representing roughly 1.4% of the company's total float as of this writing.

Now what

In addition, Potdevin noted while Lululemon saw "mixed sales results" as it entered the fourth quarter, those results have since improved. As such, Lululemon expects fourth-quarter revenue of $765 million to $785 million, assuming total comparable sales in the mid-single digits, and diluted earnings per share of $0.96 to $1.01. By comparison, analysts' consensus estimates called for revenue and earnings near the high ends of Lululemon's respective guidance ranges.

Finally, for the full fiscal year, Lululemon now anticipates revenue to be $2.32 billion to $2.34 billion (a slight reduction from previous guidance of $2.325 billion to $2.35 billion), with total comparable sales in the mid-single digits, and diluted earnings per share of $2.18 to $2.23 (an increase from previous guidance of $2.11 to $2.19).

In the end, given the combination of Lululemon's relative outperformance in Q3, its full-year earnings guidance raise, and the fact that its troubling sales trends early in the fourth quarter have since turned around, it's no surprise to see shares trading higher today.

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Steve Symington owns shares of Lululemon Athletica. The Motley Fool owns shares of and recommends Lululemon Athletica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.