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Lululemon needed to be perfect.
With Wall Street anticipating the athletic wear maker's return to gross margin and earnings growth in the fiscal second quarter, there wasn't any room for a comparable sales miss or weak outlook. So when the company reported soft results in both of those metrics, Lululemon's shares — which are up more than 46 percent year-to-date — slid more than 8 percent in extended trading.
Lululemon earned an adjusted 38 cents per share in its fiscal second quarter, on revenue of $515 million. Those results were in line with analysts expectations, according to Thomson Reuters forecasts. They also marked an increase from the prior-year-quarter, with earnings per share rising by 4 cents.
But same-store sales for the Candian yoga wear retailer disappointed, rising 5 percent on a constant-currency basis. Analysts had anticipated a 5.8 percent uptick in this metric, according to FactSet.
Meanwhile, the Canadian yoga wear retailer said it expects third-quarter revenue of $535 million to $545 million. The lower end of that guidance was below analysts' expectations, which called for $542 million, according to a Thomson Reuters consensus estimate.
The company also gave somewhat weak third-quarter earnings per share guidance, in a range of 42 cents to 44 cents a share. Wall Street expected the top end of that range, according to the Thomson Reuters estimate.
Nonetheless, CEO Laurent Potdevin reiterated the company's goals to double its 2015 revenue and earnings by 2020.
"Our progress in the second quarter, especially in gross margin and inventory, marks the beginning of our recovery in profitability and sustainable long term growth," Potdevin said in a statement.
Indeed, the second quarter marked the first time since first quarter 2014 that the company's gross margin expanded. This metric had been weighed down by inefficient sourcing and logistics, including an over-reliance on air freight. It had also been pressured by excess inventories that led to additional markdowns.
The retailer was able to limit the number of discounts it offered during the second quarter, and said its gross margin improvement has continued into the current three-month period. Its updated women's pants assortment continues to log double-digit sales gains, while its sport bras and tank tops improved and recorded gains.
Yet traffic continued to be weak, and the company's comparable-sales gain was driven by higher prices.
Also Thursday, Potdevin said Lululemon launched in August its first small-format local concept shop, in Colorado. It plans to roll out more of these 1,000- to 2,000-square-foot locations in mountain and beach communities, Potdevin said.
—CNBC's Richard Washington contributed to this report