Shares of luxury athletic wear company Lululemon (LULU - Free Report) gained more than 16.5% in morning trading Thursday after the company reported better-than-expected earnings and revenue for the third quarter of fiscal 2016.

Report Highlights Strength

After the closing bell Wednesday, Lululemon released its latest third-quarter earnings report, and it blew many expectations out of the water. The company posted adjusted earnings of 47 cents per share, which came ahead of the Zacks Consensus Estimate of 43 cents and soared 34.3% year-over-year.

Furthermore, the Vancouver, Canada-based apparel maker reported revenues of $544.4 million, which beat the Zacks Consensus Estimate of $542.7 million and grew 13.5% year-over-year. For fiscal 2016, Lululemon now projects sales to range from $2.320 billion to $2.340 billion, up from earlier projections of $2.325 billion to $2.350 billion.

Other Items to Note

Lululemon’s bumped-up guidance does factor in what the company called a “mixed” start the fourth quarter; nevertheless, Black Friday sales were up 16% and Cyber Monday up 29% year-over-year. CEO Laurent Potdevin also said the company was “on track” with its five-year plan to double revenue by 2020.

Consolidated comps for the quarter, including in-store comps and direct-to-consumer sales, increased 7%. In-store comps were up 4%, while direct-to-consumer sales soared 16% to $104 million. Additionally, gross margin expanded by a substantial 420 basis points to 51.1%, fueled by 450 bps improvement in product margins due to better merchandise margins.

Blowing Away Competition

Perhaps the most notable thing about Lululemon’s recent success is that it comes in the face of widespread struggles in the textiles industry. Year-to-date, shares of LULU have gained more than 14.1% compared to the industry’s slump of 6.6%.