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

Lululemon Athletica and Abercrombie & Fitch bumped up their current-quarter sales forecasts on Monday, underscoring a stronger-than-anticipated shopping period in the United States as customers hunt for the best bargains.

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 said it now expects revenue and profit to be higher than previously thought for the fourth quarter as shoppers flocked to its stores over the Christmas and holiday period.

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.