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Strong Sales Juice Lululemon

Shares jump after the yoga-wear maker says earnings should top forecasts.


(LULU) - Get Report

shares surged 10% Tuesday after the yoga-wear maker said third-quarter earnings should top its prior guidance.

The Vancouver-based company attributed the improved outlook to robust sales volumes and the strengthening Canadian dollar against the U.S. dollar. Lululemon estimated that same-store sales grew in the mid-30s percentage over a year earlier, compared with its guidance for growth in the mid to high teens.

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Even though the sales increase is expected to be partially offset by the currency impact on costs incurred in Canada, the company said it should exceed its previous guidance for third-quarter EPS of 5 cents to 6 cents.

Analysts polled by Thomson Financial were looking for earnings of 6 cents a share.

Shares of Lululemon have more than doubled since their July IPO as investors bet that the company's exercise clothing will benefit from strong demand from upscale, specialty-seeking shoppers despite an overall lackluster retail environment.

The stock, which went public at $18 a share, recently was adding another $4.27 to $45.50.