Shares of Lululemon Athletica (LULU -1.61%) leaped 10.5% to a new closing high of $420.71 on Thursday, following the release of the athletic apparel retailer's second-quarter results.
Lululemon's net revenue surged 61% year over year to $1.5 billion, as shoppers returned to its stores in droves. Sales at its company-operated stores rocketed 142% to $695.1 million, marking a sharp rebound from its pandemic lows when coronavirus-related store closures weighed heavily on its results.
"Our performance in Q2 was driven by a strong response to our product offering, improving productivity in our stores, and sustained strength in e-commerce," CFO Meghan Frank said in a press release.
Better still, Lululemon is becoming more profitable as it scales its revenue base. Its gross and operating margins improved 3.9 and 6.3 percentage points, respectively, to 58.1% and 20.1%. The retailer's operating income, in turn, soared 134% to $291 million.
All told, Lululemon's adjusted earnings per share increased 123% to $1.65. That was well above Wall Street's estimates for adjusted EPS of $1.19.
These strong results prompted Lululemon to boost its full-year financial outlook. Management now expects the company to generate net revenue of $6.19 billion to $6.26 billion and adjusted earnings per share of $7.38 to $7.48 in fiscal 2021. That's up from a prior forecast for revenue of $5.825 billion to $5.905 billion and adjusted EPS of $6.73 to $6.86.
"While we continue to navigate the COVID-19 environment, including supply chain headwinds, I'm excited with our momentum as we head into the second half of the year and pleased to be able to increase our guidance," Frank said.