We may be just a few trading days into the new year, but it's going to be hard to find a hotter bricks-and-mortar retailer than lululemon athletica (Nasdaq: LULU ) .
Shares opened higher this morning after the company raised its already-aggressive guidance for its fiscal fourth quarter, which will end later this month.
lululemon, an upscale yoga gear specialist, is now targeting a profit per share of $0.55 to $0.57. It earned $0.40 a share during its previous holiday quarter, and just last month management was telling investors to expect no more than $0.48 a share on the bottom line.
This isn't just a matter of margins stretching like some of its customers on a yoga mat. Sales are booming, with lululemon expecting net revenue of $237 million to $239 million. This is a far cry from the $210 million to $215 million it had originally forecast. Same-store sales are now expected to climb in percentages in the mid- to upper-20s.
I'll give your jaw a few seconds to pick itself up off the floor.
Got it? See if it drops again when I point out that comps actually rose 29% during last year's holiday quarter. This isn't just a company bouncing back from a sandbagged quarter. This is, quite frankly, the hottest retailer that you can buy these days.
It gets better.
The Canadian company has been trouncing Wall Street expectations over the past year, so even last night's guidance may be underselling the juicy truth.
Let's go over the past four quarters.
Source: Thomson Reuters.
Selling expensive fitness apparel is a sweet gig during an economic recovery if you're pushing a hot brand. Under Armour (NYSE: UA ) has also blown past the pros in each of the past four quarters. Nike (NYSE: NKE ) is three out of four, and simply met guesstimates during the other quarter. Ritzy handbag maker Vera Bradley (NYSE: VRA ) has more than doubled since going public three months ago.
The love for big-ticket apparel isn't universal, though. Designer denim has had it rough. True Religion (Nasdaq: TRLG ) has missed Wall Street's profit targets in each of the two previous quarters, and Joe's Jeans (Nasdaq: JOEZ ) is trading for less than half of its 52-week high. In other words, investors need to be as choosy with their stocks as well-to-do shoppers are with their purchases.
Do you know a hotter retailer? Prove it! Top lululemon in the comments box below.