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The Q3 cycle is over, with the bulk of companies having already revealed their quarterly results. The period was once again a time of positivity, with earnings growth remaining positive and seeing a nice boost from technology.

But one late reporter, Lululemon (LULU - Free Report), posted results that positively shocked investors. Let’s take a closer look at the results.

Lulu Enjoys Profitability Boost

Concerning headline figures in its release, Lululemon posted a 7% beat relative to the Zacks Consensus EPS estimate and reported sales 2% ahead of expectations, with both items higher than the year-ago period.

Still, the biggest highlight of the release was margin expansion, with the company’s gross margin improving 150 basis points to 20.5%. Gross profit totaled $1.4 billion, climbing a solid 12% year-over-year.

In addition, comparable store sales increased 4% year-over-year, reflecting the fact that their existing locations are still experiencing modest growth. And Lululemon added 28 new stores throughout the period, expanding its footprint nicely.

The results perked up shares in a big way, a welcomed development among investors following a rough start to 2024. Up 60% in three months, the stock has bounced back following a tough start, widely outperforming over the time period. Provided below is a chart illustrating the year-to-date performance of shares.

Image Source: Zacks Investment Research

Lululemon wrapped up the strong print by announcing a $1 billion increase to its existing buyback program, which may help put in a floor for shares.

Bottom Line

Lululemon (LULU - Free Report) helped send the Q3 earnings cycle off in a positive way, with the company’s results pleasing investors and causing shares to melt higher following the print.

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