What's going on?

Lululemon�s stock rose 5% on Friday after it reported a better quarterly profit than expected, with that powerful samana leaving shares of the so-called athleisure brand hovering at all-time highs.

What does this mean?

The challenges facing the retail sector are well known, but when life serves up lemons, the spandex strainers crush �em. Iconic yoga and running gear producer Lululemon�s latest quarterly results continued a recent run of expectation-beating earnings, reporting revenue up 22% on a year ago and profit up 35% to hit a new personal best.

As with fellow active apparel agents Adidas, online and direct-to-consumer sales are a key part of Lululemon�s growth (spiritual and otherwise). Crucially, revenue in both areas � which translates into more profit, thanks to lower marketing costs and overheads � rose 30% last quarter.

Why should I care?

For markets: Lululemon�s stock proves namastasty.
There�s treasure in athleisure: Lululemon�s stock price has shot up 55% so far this year, outpacing the overall stock market�s 19% gains. And the root of Friday�s latest rise lay in its profit predictions for the rest of 2019, which stretched further than investors had thought physically possible. Lululemon�s sustained success contrasts with the underperformance of rival Under Armour: its stock slumped after the company warned in July that North American sales would decline this year.

The bigger picture: The next Nike?
While the Lululemonade continues to flow for now, some investors wonder how long the company can keep it coming. It still does 90% of its business in North America, whereas Nike makes 60% of its sales outside the continent. Also key to ongoing expansion will be Lululemon�s ability to offer winning new product lines � like office wear and toiletries �� and to move beyond its traditional female clientele. But with men�s sales up 35% last quarter, it�s on the right track � or mat, if that�s more your sort of thing.