What happened

Athleisure king Lululemon Athletica's (LULU -0.75%) stock jumped 15% in October, according to data provided by S&P Global Market Intelligence. The company released a super earnings report in September, and it launched new products and other endeavors in October. After the stock price fell at the end of September due to broader market fears about inflation and supply chain problems, investors piled in to grab shares of the newly cheaper stock.

So what

Lululemon has been a fantastic performer over its history, both as a company and as a stock. It bounced back quickly from the pandemic, with only one quarter of declines last year. That was a 17% year-over-year decrease in the first quarter, which was itself a much smaller decline than similar companies. Since then, it's been on a roll, and sales increased 61% in the 2021 second quarter (ended Aug. 1) after a 2% rise in Q2 2020.

Four people walking outside together and carrying yoga mats.

Image source: Getty Images.

Lululemon stock has gained more than 700% over the past five years, well ahead of the S&P 500. It rose after the excellent earnings report, which also included earnings per share (EPS) of $1.59, more than double the $0.66 last year.

But it sank at the beginning of October, probably due to a tepid outlook based on supply chain challenges that will impact the company in the third quarter. Management is guiding for $1.33 to $1.38 in EPS in Q3, as compared with $1.16 last year, and $6.19 billion to $6.26 billion in revenue for the full year, or around 42% higher than 2020. It's still expecting to exceed its target goals for its "power of three" performance strategy, which intends to double e-commerce, double men's sales, and quadruple international sales.

The stock rose higher at the end of the month as the company continued to roll out growth plans, such as the launch of its connected fitness product Mirror in Canadian markets.

Now what

Lululemon may be affected by broader global trends in the short term, but it's still expecting considerable growth. This retail stock has been a powerhouse stock to own, and there is still a significant opportunity for the company to expand and for investors to gain.