Michael Burry Invests in Lululemon Stock Amid Earnings Decline
Lululemon Athletica (NASDAQ: LULU) stock has fallen to a five-year low amid declining sales and earnings, prompting investor Michael Burry to increase his stake. The athletic apparel retailer cut its full-year outlook for the second time this year following recent earnings results that showed revenue declines accelerating and guidance reduced significantly. Burry sees potential in the stock trading below $100, estimating it could deliver 15%–20% annual returns over 15 to 20 years if Lululemon stabilizes. His rationale is based on strong balance sheet fundamentals—$1.4 billion in cash and no debt—and a robust buyback program that has repurchased nearly 3% of shares this quarter. However, the stock's future depends heavily on earnings stabilization rather than growth. Earnings per share are expected to fall by about 28%, with one-time tariff refunds masking deeper declines.
Tickers: $LULU
Topics: buybacks earnings report Lululemon Michael Burry valuation