Lululemon Athletica (LULU  ) shares were trading more than 20% higher following the company's better than expected Q2 earnings result and boost in guidance. Unlike most retailers, the company's growth and momentum have been substantial enough to smooth out any disruptions due to inflation or other factors.

As a result, Lululemon shares are up nearly 40% from their low in mid-May. YTD, shares are down by 11% which is quite impressive considering the weakness in consumer discretionary and growth stocks. Currently, shares are off by 28% from their all-time high, set in November of last year. If this momentum continues and economic conditions continue to unfold favorably for retailers, then the stock should go on to make new highs some time next year.

Inside the Numbers

In Q2, Lululemon reported $2.20 in earnings per share, exceeding analysts' estimates of $1.87 per share. Revenue also topped expectations at $1.87 billion vs $1.77 billion. This was a 29% increase from last year's Q2.

Overall, the company's same-store sales increased by 23% which was better than analysts' consensus expectations of 17.6% growth. It said that traffic to stores and its websites remains strong and has shown minimal impact from inflation. Overall, digital traffic was up 40%, while in-store traffic increased by 30%.

The company is also launching a customer loyalty program which it hopes will increase repeat customers. It has a free version and a premium tier with a $39 per month fee to give subscribers early access to products, exclusive items, and invitations to in-person events.

One factor in the resilience of Lululemon's customer base is that it encompasses the upper quartile of incomes whose consumption is less affected by inflation and other changes in economic growth. However, even among its peers, the company has outperformed as other higher-end retailers have reduced their outlook and noted signs of demand weakening. In contrast, Lululemon has hiked its guidance for two straight quarters. It also added 21 new locations during the quarter and now has a total of 600.

It sees full-year revenue between $7.865 billion and $7.940 billion, which is about a 7% increase from its previous estimate. Its long-term plan of reaching $12.5 billion in revenue by 2027 also remains intact as it continues to expand into menswear, footwear, and membership-based fitness classes.