Correction: A previous version of this story incorrectly stated the percentage of sales at American Eagle Outfitters that come from online. The percentage is in the high teens, not 5%.
On Wednesday, Lululemon said its direct-to-consumer sales, which are comprised of results from its Lululemon and children's brand Ivivva websites, surged 28% year-over-year to $146.3 million. The company said customer traffic to its sites and the conversion rate both contributed to the gain.
For the year, Lululemon's online business hauled in $401.5 million in sales, up 25% from the previous year. Lululemon's online business now represents an impressive 20.8% of its overall business, toward the higher end among specialty apparel retailers. Teen apparel retailer American Eagle Outfitters (AEO) - Get American Eagle Outfitters Inc. Report , for example, gets a percentage in the high teens of its sales online.
Lululemon continues to do well on digital due to in-depth product details, an impressive amount of choices and easy site navigation. Further, the company's mobile app has received good reviews, with consumers citing ease of use.
Lululemon's online growth reflects the strength of Lululemon's brand and the way it's improved product quality and styling over the last year, according to Mizuho Securities U.S.A. retail analyst Alex Pham via email.
"Looks like very, very strong cost controls coupled with strong same-store sales, especially via online," saidTheStreet's Jim Cramer, Portfolio Manager ofAction Alerts PLUS, of the most recent results. "I am surprised how strong this quarter is."
And that strength may continue -- Lululemon is working on a website redesign that is scheduled to hit some time in the second quarter, offering improved product images and other enhancements.
Lululemon's online momentum helped the company deliver much better-than-expected results for the fourth quarter. Earnings came in at 85 cents a share, crushing estimates for 80 cents a share.
In December, the company had estimated earnings would be in a range of 75 cents a share to 78 cents a share. Same-store sales increased 5% excluding the impact of the strong U.S. dollar, relatively in line with guidance for a mid-single digit improvement.
Shares were up about 9% in morning trading Wednesday.