Lululemon Q4 - Baggy payoffs

Lululemon shares soared 16% on Friday, enjoying their best single-day performance since 2018. The rally came after the upscale athleisure company delivered strong third-quarter results and raised its full-year guidance.

Revenue rose 9% to $2.4 billion, with standout international growth (+25%) and a 39% surge in China offsetting a 2% decline in the Americas. Comparable sales grew 4%, reversing a three-quarter slowdown.

International expansion, online sales growth, and new men's products will help the brand hit a $12.5 billion revenue target by 2026. The brand's pivot to baggier styles and broadening its lineup also helped reignite demand, particularly in its core leggings business.

Lululemon's agility to protect profitability and its success in defying broader retail headwinds, shows the brand's resilience and ability to buck trends in a tough market.