What happened

lululemon athletica (NASDAQ:LULU) shareholders outperformed a booming market last month. The stock jumped 34% in May compared to a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally was part of a longer boost for the apparel specialist's shares, which are up over 500% since mid-2017.

A woman holding a yoga pose.

Image source: Getty Images.

So what

May's jump reflected growing optimism on the part of investors that Lululemon will quickly bounce back from the COVID-19 sales disruption. The chain's last earnings report provided plenty of impressive metrics to support that judgment, including a 20% revenue increase, rising market share in niches like menswear and kid's apparel, and increased profitability. Yet the real test will be whether Lululemon shifted more business to its online channel, as Nike did, before quickly picking up where it left off with its popular athleisure releases.

Now what

The retail chain will announce fiscal first-quarter results on June 11 in a report that will reflect the deepest impact of the COVID-19 pandemic. Investors are betting that Lululemon will show strong e-commerce sales, but that announcement is still likely to include at least a short-term pressure from falling customer traffic and worsening economic growth trends.

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