Lululemon Athletica Inc. expects fourth quarter sales to surpass the market’s expectations, showing the upscale activewear brand is fending off upstart competitors and slower growth in consumer spending.

Lululemon Athletica and Abercrombie & Fitch raised their current-quarter sales targets on Monday, helped by demand for heavily discounted apparel during the holiday season, even as steep promotions took a bite out of some retailers' margins.

Lululemon’s stock rallies toward a 10-month high after guidance for profit, revenue and gross margin were raised.

Shares of Lululemon Athletica ($LULU) surged nearly 1% on Monday after the company raised guidance on revenues and earnings for the fourth quarter, lifting retail sentiment. The apparel maker now expects net revenue to be between $3.

Lululemon Athletica on Monday raised its current-quarter sales and profit targets, as the sportswear maker benefited from strong demand for its apparel during the holiday shopping season. Lululemon's shares were up nearly 4% in premarket trading.