Investors Who Wrote Off Lululemon Were Wrong as Shares Jump on Strong Revenue Growth. Is It Too Late to Buy the Stock?

Shares of Lululemon Athletica ( LULU -1.60% ) jumped following strong fiscal first-quarter results, but the stock has still had a difficult year, down over 30% year to date. Let's dive into the company's Q1 results, look at why the stock has struggled, and assess whether now is a good time to buy the stock.

Sales and margins remain strong For its fiscal first quarter, Lululemon saw its revenue rise 10%, or 11% on constant currencies, to $2.2 billion. Women's sales rose 10%, while men's sales were up 15% and accessory sales edged up 2%.

Revenue in the Americas increased 3%, or 4% in constant currencies, while International sales jumped 35%, or 40% in constant currencies. U.S revenue edged up 2%, while Mainland China sales soared 45%, or 52% in constant currencies.

Same-store sales rose 7% in the quarter. International same-store sales surged 29%, while Americas same-store sales were flat. China saw a 33% increase in same-store sales.

Lululemon said that it missed several opportunities on the women's side of the business in the U.S. This included issues with bags, and having too narrow a color assortment, especially for leggings.

The company ended the quarter with 711 stores, unchanged from the quarter's start. It had 662 stores at the end of Q1 last year. The athleisure brand saw its gross margins rise 20 basis points to 57.

7%, while product margins were up 120 basis points. Gross margins for apparel brands are particularly important, as they reflect what percentage of merchan.