Burry Calls Lululemon ‘Trickster’ as He Buys Below $100

Michael Burry wrote on Substack that Lululemon is the “trickster” in his portfolio, that it is his largest holding and that he has been buying shares after the stock dropped below $100. He added he would buy more if the price falls further, arguing the market may be treating current problems as permanent rather than temporary.

Lululemon shares fell 17.4% in a single session to $99.10 and are trading roughly 80% below their all-time high. The decline followed results for the fiscal second quarter that showed weakening sales and prompted management to lower full-year guidance.

The company reported revenue of $2.42 billion for the quarter, a 4% decline from a year earlier, and comparable sales down 9%. Revenue in the Americas fell 8%, with comparable sales there down 12%. Reported earnings per share were $2.92, a figure that included an $0.86 benefit from tariff refunds.

Management trimmed full-year revenue guidance to a range of $10.35 billion to $10.5 billion from $11 billion to $11.15 billion and narrowed its earnings outlook to $9.48 to $9.73 per share.

Executives noted uneven responses to recent product launches and increased competition from brands such as Alo Yoga and Vuori. The company said some product assortments and store traffic patterns were weaker than expected.

Market analysts responded with differing assessments of value and risk. A major bank analyst cut his price target to $95 from $154 while keeping a Neutral rating. Another large bank reduced its target to $106 from $120, citing weak traffic, product assortments that are not resonating and the potential for further earnings pressure. A securities firm analyst wrote that incoming chief executive Heidi O’Neill faces “a mountain to climb,” pointing to fading brand momentum and market-share losses.

Heidi O’Neill, a former Nike executive with experience in product, merchandising and brand strategy, is scheduled to take over as CEO following months of leadership uncertainty. Analysts say she will inherit shrinking Americas sales, tighter margins and lower investor confidence.

A Morningstar analyst maintained that Lululemon shares remain attractive and said the brand still has the potential to support premium pricing even if past growth rates do not return quickly.

Burry’s purchases and the analysts’ reactions reflect differing views on whether Lululemon’s recent operational and product issues are temporary or longer term. Investors and management will be watching sales trends, product reception and upcoming results for signs of stabilization.