lululemon athletica (NASDAQ:LULU) has seen it all. After being a huge success in its debut as a yoga-apparel retailer, Lululemon found itself threatened by quality-control issues that could have destroyed the company. Yet rather than giving up, Lululemon powered ahead and produced an amazing comeback story that revealed just how popular the yoga movement is, and how important a role the company has played in it.

Coming into Thursday's fiscal second-quarter financial report, Lululemon shareholders wanted to see the retailer follow in the footsteps of some other high-profile retail names and sustain its own positive momentum. Lululemon's numbers were strong, and there's no doubt that the yoga specialist is at the top of its game and sees nothing but clear skies ahead.

Lululemon feels the burn

Lululemon's fiscal second-quarter results looked familiar to those who've watched the company's ascent over the years. Revenue of $883.4 million was up 22% from year-ago levels, accelerating from its growth rate in the first quarter. Net income was higher by more than 30%, coming in at $125 million and producing earnings of $0.96 per share. Investors following the stock had expected just $0.89 per share on the bottom line.

Lululemon retail store as seen from street, with black storefront under a white domed building.

Image source: lululemon athletica.

Lululemon continued to produce amazing core growth. Comparable sales were up 15%, which was a faster pace than it managed three months ago. Comparable-store sales in Lululemon's retail locations accelerated to 10%. The yoga specialist got even faster growth from its direct-to-consumer business, where net revenue jumped 30% from year-ago levels. Lululemon now gets about a quarter of its revenue from the direct-to-consumer channel.

Margin performance also saw incremental improvement. Gross margin of 55% was higher by a fifth of a percentage point from the same period last year, and operating margin got a half percentage point bump to 19%. Lower tax rates also kept giving Lululemon's bottom line a boost.

Store expansion has been a key part of the company's growth, and Lululemon kept opening stores this quarter. Five new locations brought Lululemon's total count to 460, with more than 1.52 million square feet of retail space across the network.

CEO Calvin McDonald's comments were quite positive. "We continue to make progress," McDonald said, "in delivering against our Power of Three growth pillars -- product innovation, omni-guest experience, and market expansion." The CEO was happy to see those efforts result in such strong metrics for the business.

What's next for Lululemon Athletica?

Lululemon doesn't think anything's going to stop it anytime soon. As McDonald put it, "Our success demonstrates the significant runway in front of lululemon, and I'm grateful to our teams for bringing our vision to life."

That optimism showed up in its guidance. For the full year, Lululemon now believes that revenue will be between $3.8 billion and $3.84 billion, up by $70 million from its expectations just three months ago. Full-year earnings of $4.63 to $4.70 per share were higher by $0.12 from previous projections. Third-quarter guidance was also positive, with expectations for $880 million to $890 million in sales, comparable sales in the low teens, and earnings of $0.90 to $0.92 per share.

Interestingly, Lululemon chose to do some stock repurchases, even with its share price soaring this year. Yet the amounts involved were modest, as the company said it bought back about 9,600 shares of stock at an average cost of just over $164 per share. That amounts to roughly $1.6 million, or less than 0.01% of its current market capitalization.

Lululemon investors were pleased to see the yoga retailer continue to make progress, and the stock rose 3.5% in after-hours trading following the announcement. As a pioneer in the athletic-apparel movement, Lululemon has a lot of runway left to expand internationally and broaden its product offerings into more categories to serve an ever-rising number of customers.

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