Lululemon

Hold your breath, lululemon athletica (NASDAQ:LULU) investors, because your favorite yoga apparel specialist is set to report fiscal second-quarter 2015 results this Thursday, July 10. With shares already up nearly 70% over the past year -- including an 18% rise so far in 2015 as of this writing -- you can bet the market will be listening closely to what lululemon says.

Here are three things I think investors would be wise to watch when lululemon's report hits the wires:

1. The headline numbers
Three months ago, lululemon offered guidance for fiscal Q2 revenue of $440 million to $445 million, with total comparable sales growth in the high single-digit range. Excluding the effects of any share repurchases during the quarter (300,000 shares were repurchased in fiscal Q1), lululemon stated that should translate to earnings per diluted share of $0.31 to $0.33.

But analysts are even more optimistic, with consensus estimates calling for revenue of $445.8 million, and earnings at the high end of lululemon's expected range. To its credit, however, lululemon has easily exceeded Wall Street's expectations for earnings in each of its past four quarterly reports, and also beat on revenue in three of those four occasions.

Looking forward, lululemon's current full-fiscal-year guidance revenue of $2.00 billion to $2.05 billion, and diluted earnings per share of $1.86 to $1.91. But analysts want more, with average estimates modeling fiscal 2015 revenue of $2.03 billion, and earnings of $1.93 per share.

2. Progress in Men's and ivivva 
I also want to hear more from lululemon about the state of two promising growth opportunities, namely its men's segment, and the kid-centric ivivva store concept.

Lululemon

Credit: lululemon.

Regarding the former last quarter, lululemon CEO Laurent Potdevin stated the men's business was enjoying "accelerated momentum" as demonstrated by its strong 19% comparable store sales growth. For that, Potdevin credited an expansion of products within popular men's clothing categories, as well as experimentation with new store formats and male-oriented shopping experiences -- both crucial to changing lululemon's image as a primarily female-focused brand. And we already know these experiments have expanded into the second quarter to include the curious release of a limited-edition craft beer in July.

Meanwhile, lululemon's ivivva children's clothing chain posted even more impressive 29% comps last quarter, so it should come as no surprise the company has chosen to accelerate the build-out of ivviva locations. Of the 14 company-owned stores opened in fiscal Q1, for example, half were ivivva locations, and five more were slated to be opened by the end of Q2. For perspective, by the end of last quarter 240 of lululemon's 316 total stores were in its comparable store base, and only 15 of those locations were ivivva. Meanwhile, 37 of the company's 86 total showrooms in operation showcased its ivivva brand.

3. Impending margin expansion
Finally, keep an eye not just on lululemon's margins during Q2, but also its anticipate margin trends going forward.

During last quarter's conference call, for example, management noted merchandise margins are expected to continue to stabilize and strengthen in fiscal Q2 relative to the same year-ago period -- albeit with continued headwinds in the current quarter from both foreign exchange and high air freight costs related to prior West Coast port delays. That said, they also suggested the latter should wane in the second half of the fiscal year, so the market will want to know that assumption is still intact. In addition, lululemon is currently deleveraging from investments aimed at improving operational efficiency and its supply chain, and as a result should hopefully see some of the early benefits this quarter of a more seasonally appropriate, in-stock product assortment.

Consequently, lululemon anticipates gross margin in fiscal Q2 of 48% to 49%. That's roughly flat from the 48.6% lululemon achieved last quarter, and also below its long-term target in the low- to mid-50% range. But as long as lululemon shows continued signs of stabilization given the factors above, our fickle market should have nothing to complain about given the foundation management has laid.

Steve Symington owns shares of lululemon athletica. The Motley Fool owns and 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.