What happened

Lululemon Athletica (NASDAQ:LULU) shareholders beat a surging market in November as the stock rose 17% compared to the 11% increase of the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to the apparel retailer's already-strong gains for the year. Through early December, it was up 60% in 2020.

A young woman holding a yoga pose.

Image source: Getty Images.

So what

Lululemon's share price benefited last month from surging investor optimism tied to positive news about potential COVID-19 vaccines. The company also made some significant leadership changes in November, including expanding its board of directors and naming a new chief financial officer, Meghan Frank.

But what likely drove more of that share price rally was optimism about the company's upcoming earnings report, which is due to be released on Dec. 10.

Now what

When lululemon delivers the results for its fiscal Q3, which ended in the first week of November, investors might see signs of an operating rebound. The chain notched a 2% sales boost in its fiscal Q2, and most analysts are expecting its revenue growth to accelerate to 9% this quarter, with sales rising to about $1 billion. Like most retailers, lululemon has been hurt by the COVID-19 pandemic. But its robust e-commerce platform and its focus on athleisure products have helped it to grow even as the wider apparel industry shrank.

Investors will learn next week whether lululemon maintained its positive momentum as it headed into the key holiday shopping season.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.