company had its IPO yesterday trading at 29.00 and is already at 35.57

LLL(TSX) or LULU(NASDAQ)

By Susan Taylor

OTTAWA (Reuters) - Newly issued shares of Lululemon Athletica Inc. (LULUV.O: Quote, Profile, Research) (LLL.TO: Quote, Profile, Research) roared 50 percent higher in their first day of trade on Friday as investors stretched for a piece of the trendy workout-wear retailer.

"A lot of people are clamoring for the shares," said Accountability Research Corp. analyst Mark Rosen in an interview.

"It's a name people recognize and see as trendy. And it has such a high-growth profile to it, that there's a lot of excitement."

Lululemon shares jumped $9.25 on Nasdaq to trade at $27.25 on a volume of more than 12 million shares. On the Toronto Stock Exchange, shares rose to C$29.47 before slipping back to

C$28.94.

The offering of 18.2 million shares, adjusted several times in recent weeks, was priced at $18. That is above the range of $10 to $12 a share that the market had expected.

"Lululemon shares offer investors an opportunity to participate in an early stage retail growth story," RBC said in a note that set a $23 stock target.

"Our estimates, which we believe are conservative, imply sales growth of 30-44 percent annually through 2009 and 41-52 percent growth in earnings per share over the same time horizon."

In the IPO, 2.29 million shares were offered by Vancouver, British Columbia-based Lululemon and 15.9 million by stockholders. Underwriters have an option to purchase up to 2.73 million additional shares.

While Rosen said the stock is overvalued and trading separately from its fundamentals, it reflects the lure of an attractive retail offering in a weak IPO market.

"We concentrate mostly on Canada and the IPO market has been, for the most part, income trusts and nothing but for the past several years," Rosen said.

"This is one of the more significant names, I'd say, over this year and maybe even the past 12 months."

Lululemon is also one of the few Canadian retailers in recent years to bask in the attention that a U.S. listing brings, analysts said.

The maker of high-end yoga wear has earmarked money from the offering for new stores and working capital. It is expected to focus expansion efforts in the United States.

The company operates 38 stores in Canada, 17 in the United States, three in Japan and one in Australia. Current plans call for the addition of 20 to 25 new stores in 2007 and 30 to 35 in 2008, RBC said.

"We believe that the U.S. market could support a store base in the range of 300-350 over the next several years as the brand grows and gains traction with the consumer," the RBC note added.

Popular for its technically-advanced apparel, Lululemon's clothes have such features as moisture wicking, odor control, and a seaweed compound that releases vitamins and minerals directly onto the skin.

Founded in 1998 by Dennis "Chip" Wilson, the company's gross margin is at the top of the apparel retail pack, analysts say. RBC said the margin has averaged 51.8 percent over the last five years.

($1=$1.06 Canadian)