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Lululemon Athletica inc. (LULU), Nike Inc (NKE): Can This High-Flying Retail Stock Score New Highs? an apparel company that built its success on catering to women participating in a “touchy-feely” activity repeat that success by marketing to men?

Although this Canadian company has marketed its products to men since it was founded in 1998 — and earns a surprising 12% of its revenue from that segment — it is looking to attract men in the U.S. and overseas. However, the company had an embarrassing setback earlier this year when it was forced to recall some of its women’s yoga pants because a manufacturing flaw had made them too revealing for some activities. The fiasco sent its stock price reeling to $65 in March from a high above $75 last year.

Lululemon Athletica inc. (NASDAQ:LULU)

If you haven’t guessed, I’m talking about Lululemon Athletica inc. (NASDAQ:LULU). The company is now looking to replace CEO Christine Day, who has been at the helm for more than five years. Lululemon Athletica inc. (NASDAQ:LULU)’s best days may still be ahead, considering that more people worldwide are becoming attuned to maintaining a healthy lifestyle. The company is also looking to grow further by appealing to the youth market and developing fabrics that provide benefits such as ultraviolet protection.

Lululemon Athletica inc. (NASDAQ:LULU) sells casual wear and fitness apparel such as pants, tops, shorts and jackets. The company has seen its net revenue grow from $353 million in 2009 to $1.3 billion last year, up more than 250%. During this period, its earnings per share (EPS) have also grown, from 29 cents to $1.88, gaining more than 500%.

The company sells its wares through retail partners and nearly 200 of its own stores in Canada, the U.S., Australia and New Zealand. Although Lululemon Athletica inc. (NASDAQ:LULU) sees more near-term potential in the U.S., which accounted for 61% of its profit last year, it is planning to expand overseas into other Asian and European markets, and it already has showrooms in Hong Kong and the U.K. Lululemon Athletica inc. (NASDAQ:LULU) has also been increasing its online presence, which accounted for 14% of its net revenue last year.

For its first quarter this year, Lululemon’s net revenue was up 21%, to $345 million, from the same period last year, but gross profit was up only 9% after the see-through pants fiasco. EPS for the quarter was flat at 32 cents. For its full fiscal 2013, the company anticipates that net revenue will be up more than 20% from fiscal 2012, at about $2 a share.

Lululemon Athletica inc. (NASDAQ:LULU)’s margins compare favorably with those of its competitors. Its gross margin of 55% leads those of ADIDAS AG OR (OTCMKTS:ADDDF) at 48%, Nike Inc (NYSE:NKE) at 44%, and Under Armour Inc (NYSE:UA) — which, in contrast to Lululemon, is a male-centered brand that’s now reaching out to female athletes — at 48%. Lululemon’s operating margin of 27% is also ahead of the competition.

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