lululemon athletica (NASDAQ:LULU) is set to report its fiscal 2014 first-quarter earnings before the market opens on Thursday. Investors are hoping for a strong quarter to help fuel a comeback in the high-end retail stock. Shares of Lululemon have fallen nearly 25% so far this year, with the stock trading near a 52-week low today. Let's look at Wall Street's estimates for the quarter and whether Lululemon could overdeliver on those predictions.

Great expectations? Not so much.
Wall Street is expecting Lululemon to post a profit of $0.32 per share in the first quarter, down from earlier projections for $0.38 per share. That would be flat from the same period a year ago. While the Street's profit outlook is hardly encouraging, it falls squarely in the middle of Lululemon's own estimates. After reporting fourth-quarter results in March, the retailer lowered its Q1 outlook. Lululemon now expects first-quarter earnings per share in the range of $0.31 to $0.33.

Fortunately, the Street is more optimistic about Lululemon's ability to grow revenue in the quarter. Wall Street is looking for quarterly revenue of $381.21 million, up more than 10% from $345.78 million in the year-ago period.

Another bright spot heading into earnings is the fact that Lululemon has topped Wall Street estimates for the past four consecutive quarters, despite it being one of the most challenging years in the company's history. Moreover, for the first quarter of fiscal 2013, Lululemon's profit was nearly 7% better than analysts had expected. The question now is whether history will be repeated.

Source: lululemon athletica. 

This will be the company's second earnings announcement with its new chief executive, Laurent Potdevin, at the helm. And while history is on Lululemon's side, beating expectations could prove difficult this time around. For starters, Lululemon is in a transitional period. The retailer is heavily investing in new product categories such as beach gear and cycling, while also pushing into new markets abroad.

During the company's fourth-quarter earnings call, Potdevin said, "2014 is an investment year with an emphasis on strengthening our foundation, reigniting our product engine, and accelerating sustainable and controlled global expansion." As a result, investors can expect increased costs to weigh on Lululemon's bottom line in the near term. However, long-term investors should be rewarded as Lululemon's turnaround appears on track. As Lululemon's new product mix hits the market and drives increased demand, we should see comparable sales pick up in the later part of the year.

Foolish final thoughts
Given the lack of investor confidence in this stock, Lululemon would certainly surprise Wall Street if it were to top first-quarter expectations this week. Unfortunately, I doubt the retailer can pull it off this time around. Lululemon's turnaround isn't going to happen overnight. At least for now, increased investments in rebuilding its brand and expanding into international markets will likely hurt earnings in the first quarter.

Tamara Rutter owns shares of lululemon athletica. The Motley Fool recommends lululemon athletica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.