Christine Day, the recently appointed C.E.O. of Lululemon Athletica, exhibits the kind of optimism usually reserved for religious leaders and self-help gurus.

"Even the Great Depression only lasted a certain number of years!" she chirps, by way of justifying the company's expansion plans in the face of a retail climate going more sour by the day.

For those who aren't familiar with the budding specialty retailer from Canada, Lululemon is a purveyor of $90 yoga pants and $60 sports bras. Its stores have "guests" rather than customers and "educators" rather than employees. At the core of the brand's identity is a 31-point manifesto that includes such imperatives and affirmations as "dance, sing, floss, and travel"; " do one thing a day that scares you"; and, somewhat more oddly, "children are the orgasm of life."

In short, this is the type of company that would seem to be on the endangered-species list at a time when consumers are becoming less and less brand-centric and buying purely on price.

Investors appear to agree. The stock is down 60 percent since its high of $58 last October, underperforming peers like J. Crew, American Eagle, Urban Outfitters, or Gap for the period.

But if Lululemon breaks the mold of the fad, overexpanding retailer doomed to Chapter 11 scrap heap, the story behind it may be in some numbers that have been overlooked well into the current retail recession.

Lululemon averaged a stunning 34 percent same-store sales growth in 2007, and as of July, it still boasted an 18 percent comparable store sales gain from a year earlier. When Lululemon announced second-quarter earnings in September, it beat analyst expectations for the period while maintaining its full-year guidance.

Analysts estimate that the retailer, which generated revenues of $275 million in 2007, averages sales per square foot around $1,000—by comparison, Gap's sales per square foot of $376 in 2007, and American Eagle's were $638.

All of that explains why, of the nine analysts covering Lululemon, seven rate the stock as a "strong buy" or "buy," and two rate it as a "hold." Sharon Zackfia, a research analyst at William Blair & Company, explains the poor performance over the past year as a combination of jitters over changes in senior management and the stock experiencing the multiple compression that most retailers already underwent in 2007.

Still, while others are being forced to shutter stores, Lululemon is expanding. It's looking to add 30 to 35 stores per year to its current count of 91, launching an e-commerce site next fall, and quietly moving beyond yoga and into product lines for running, dance, and Pilates.

The hope inside the company is that Lululemon's customers are becoming devoted in a segment that has been chronically ignored.

"The women's athletic market has long been underserved by industry behemoths that have simply offered smaller sizes of men's patterns as their female product," says Zackfia.

While apparel spending overall has been one of the softest areas of consumer spending over the past year, activewear continues to be a bright spot. Zackfia estimates that the women's sports-apparel market in the U.S. is as large as $10 billion.