Lululemon's Lab store on Bond Street in New York City.

Lululemon Athletica Inc. beat analysts’ earnings and sales estimates for the fourth quarter, sending the stock higher in early trading, even though the guidance was on the light side. The company also addressed supply chain problems in the earnings conference call.

Net income for the quarter was $117 million, or 85 cents a diluted share, up from $110 million, or 78 cents, a year ago. The FactSet estimate was for 80 cents a diluted share. That helped push the stock up over 5 percent to $64.50 in pre-market trading.

Net revenue for the three months ended Jan. 31 increased to $704 million from $602 million a year earlier. For the full year, the company’s net revenue rose 15 percent to $2.1 billion over last year’s $1.8 billion.

“I’m very pleased with our strong finish to the year with positive momentum across all channels,” said Laurent Potdevin, Lululemon’s chief executive officer. “In 2015, we made bold moves across the organization, elevating design and innovation and developing our infrastructure to position us for the future. As I look forward to 2016 and beyond, I am excited and confident that we have the right team in place to execute on our long term strategies.”

Gross margins declined 120 basis points and part of that was attributed to the strong dollar, but supply chain issues were another factor. Potdevin said that the company was focused on improving its supply chain problems and had hired a new chief of supply chain officer.

“They lost 120 (basis points) in gross margin and on the operating margin they lost a couple hundred. Compared to where they were a few years ago, they’ve made great progress,” said Craig Johnson, president at Customer Growth Partners. “But again it’s a company that is still trying to get its supply chain in shape. It’s still not where it needs to be.”

The company plans on reducing cancellations and late stage change orders, plus shipping more product by ocean freight. Johnson noted that it was those last-minute changes that was costing the company by forcing it to fly product instead of being able to ship it by ocean.

Comparable-store sales increased 5 percent in the quarter and direct-to-consumer net revenue increased 33 percent. Johnson wasn’t surprised to see the strength in its direct-to-consumer business because of the strong brand loyalty. “A lot of fans aren’t near stores and that’s driving the DTC growth,” he said, “It also shows that the store fleet is relatively undeveloped.”

Expenses jumped to $188 million for the quarter from last year’s $152 million. The higher expenses were attributed to store openings, digital marketing expenses and supply chain initiatives. Lululemon opened 10 stores in the fourth quarter and closed one. The brand expects to open 44 stores in 2016, including 11 new stores in Asia and Europe and 12 Ivivva stores.

Looking ahead, Lululemon expects net revenue in the first quarter of fiscal 2016 to be in the range of $483 million to $488 million. Diluted earnings per share are forecast to be in the range of 28 cents to 30 cents. The earnings-per-share guidance is lower than the FactSet estimate of 37 cents, but the revenue guidance is inline.

For the full year, net revenue is projected to be in the range of $2.28 billion to $2.33 billion with diluted earnings per share in the range of $2.05 to $2.15.

During the fourth quarter of fiscal 2015, the company repurchased 2.1 million shares of the Company’s common stock at an average cost of $49.52 a share.