Lululemon Athletica Inc. (LULU) just reminded Wall Street why it remains one of the most closely watched names in retail. The athletic apparel company delivered third-quarter results Thursday that exceeded expectations across the board, prompting analysts to scramble and update their forecasts.

The headline numbers tell the story: Lululemon reported quarterly earnings of $2.59 per share, crushing the analyst estimate of $2.27 by 14.15%. Quarterly revenue came in at $2.57 billion, beating the Street estimate of $2.48 billion and marking a solid increase from the $2.4 billion generated in the same period last year.

Management clearly felt confident enough to raise the bar. The company boosted its fiscal 2025 GAAP EPS guidance to a range of $12.92 to $13.02, right in line with the $12.95 analyst estimate. Revenue guidance also got a lift, with Lululemon now expecting between $10.96 billion and $11.05 billion for the full year, versus the $10.979 billion consensus.

Beyond the numbers, the company announced a CEO succession plan and authorized an increase to its share buyback program, both moves that signal management's confidence in the business trajectory.

Investors responded enthusiastically. Lululemon shares surged 10.7% to $207.01 in pre-market trading.

Analysts wasted no time adjusting their outlooks following the earnings beat. Here's how the Street responded:

• B of A Securities analyst Lorraine Hutchinson maintained Lululemon with a Neutral rating and raised the price target from $185 to $220.
• Telsey Advisory Group analyst Dana Telsey maintained the stock with a Market Perform rating and raised the price target from $200 to $215.
• Jefferies analyst Randal Konik upgraded Lululemon from Underperform to Hold and raised the price target from $120 to $170.

The upgrades reflect a growing sense that Lululemon is successfully navigating a challenging retail environment while maintaining its premium brand positioning.