11:19 AM EDT, 06/06/2025 (MT Newswires) -- Lululemon (LULU) modestly exceeded expectations with its fiscal Q1 results but lowered full-year guidance, citing the potential impact of tariffs and ongoing consumer softness, Oppenheimer said in a Friday note.

Fiscal Q1 EPS rose to $2.60 from $2.54 a year earlier, slightly ahead of the $2.58 consensus. Revenue climbed 7.3% to $2.37 billion, topping the $2.36 billion estimate. However, the company now expects full-year EPS of $14.58 to $14.78, down from prior guidance of $14.95 to $15.15 and below the $14.86 consensus.

Oppenheimer said the guidance revision reflects increased tariff-related costs, higher markdowns, and foreign exchange headwinds. Gross margin is now expected to decline by 110 basis points for the year, versus a prior estimate of 50 basis points.

Management's cautious guidance reflects the uncertain size and timing of new U.S. tariffs and possible retaliatory measures abroad. Lululemon's decision not to immediately pass on higher costs to consumers could help the brand gain share from smaller rivals forced to raise prices sooner, according to the note.

The firm also noted Lululemon's track record of outperforming initially cautious expectations as sector conditions stabilize.

Shares of Lululemon were down nearly 20% in recent trading. The firm sees the pullback as a buying opportunity for investors with an intermediate to long-term horizon.

Oppenheimer reiterated an outperform rating on the company's stock, calling the brand and operating fundamentals intact.

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