10:42 AM EDT, 09/05/2025 (MT Newswires) -- lululemon athletica's (LULU) efforts to address merchandising shortfalls could take time and further impact top and bottom-line in the near term amid a volatile macroeconomic and sector backdrop, Oppenheimer said in a Friday research note.

The company's lack of innovative products is affecting sales conversion and topline growth, especially with core consumers in legacy markets. Despite management's plans to resolve product missteps, fresh merchandise sets are unlikely to roll out until early 2026, according to the note.

Management believes that while consumers react favorably to new styles, demand for new seasonal colors on core assortments has faded considerably, likely due to product life cycles, which have run too long within several of the company's core categories, according to the brokerage.

Tariffs and trade uncertainty could further complicate the company's internal repositioning efforts in the near term, but it is positioned to leverage a well-developed supply chain infrastructure to efficiently capture market share from smaller operators, analysts wrote.

Oppenheimer now expects fiscal 2025 earnings of $12.77 from $14.60 earlier, predicated upon total comp sales growth of flat to 2%. For fiscal 2026, the brokerage lowered its EPS forecast to $12.75 from $16, reflecting a continuation of below-algo growth.

The brokerage said it downgraded the stock to perform from outperform and removed its price target.

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