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Investor expectations for Lululemon Athletica Inc. are sky high, but analysts are beginning to question whether sales of the company's high-end yoga apparel can keep pace with those elevated hopes in a weakening economy.

On Friday, the Vancouver-based company will offer a reality check when it releases financial results for the second quarter.

Analysts expect Lululemon to report profit of $32-million (U.S.) or 22 cents a share on sales of $205.5-million. That would represent profit growth of 47 per cent and revenue growth of 53 per cent from a year earlier.

The company has beaten the Street's number for the last five quarters, and investors are by and large betting it will extend that streak to six.

After adjusting for a two-for-one stock split, the shares have risen 28 per cent since management announced first-quarter results on June 10. In comparison, the S&P/TSX composite index has fallen 3 per cent during that period. The runup has left Lululemon shares trading at a price-to-earnings multiple of 51.6, compared with an industry average of 17.6.

Part of the heightened enthusiasm for the stock followed comments by chief executive officer Christine Day in June that the company had fixed an inventory shortage problem and was moving its e-commerce operations in-house, in time for the fall and holiday shopping season.

"We believe there is room for continued productivity increases as we build our inventory position, invest in our stores … and execute our strategy," Ms. Day told analysts on the company's last quarterly conference call.

Since then, the company has continued to forge into the U.S. market, even as consumer confidence and spending power there has declined. U.S. unemployment stands at 9.1 per cent and the economy created zero new jobs in August.

But that hasn't deterred Lululemon's expansion. In May, 85 of Lululemon's 142 stores were based in the U.S. During July and August, the company announced six more U.S. openings, in Kansas, Connecticut, New Jersey, Alabama, Indiana and Florida.

Consumer discretionary stocks have outperformed the broader market during second-quarter earnings season. Using the S&P 500 index as a guide, 78 per cent of companies in the sector beat expectations this period, compared with 71 per cent for the entire group.

Nevertheless, analysts say that conditions could get much more difficult if the economy suffers further and consumers pull back on spending. John Morris, an analyst with BMO Nesbitt Burns Inc., says today's uncertain environment requires investors to pick stocks of companies that dominate their respective apparel markets.

"We continue to see those that have pricing power and in-demand product emerging as winners for fall, while those lacking strong product and/or pricing power falling by the wayside," he wrote in a report this month.

He rates Lululemon shares "market perform" and has a $60 target for them. But his top picks in the sector are Abercrombie & Fitch Co., Express Inc. and The Children's Place Retail Stores Inc., each of which he rates "outperform."

Six analysts rate Lululemon shares a "buy", 11 deem it a "hold" and two call it a "sell", according to data from Bloomberg.