Legendary investor Michael Burry is back in the spotlight — this time for doubling his stake in Lululemon (NASDAQ:LULU). According to Scion Asset Management’s Q3 13F filing, Burry boosted his position in Lululemon stock from 50,000 shares to 100,000 shares, lifting its reported value from roughly $11.9 million to $17.8 million as of September 30.
The move comes amid a difficult year for Lululemon stock, which has plunged 58% in 2025, pressured by weak U.S. sales and higher import tariffs. Yet, strong international momentum and a new NFL apparel partnership could help the company regain its stride. For Burry, the downturn may represent a chance to buy a premium brand at a rare discount.
About Lululemon Stock
Founded in 1998, Lululemon Athletica is a leader in athletic and lifestyle apparel, best known for its yoga and performance wear. The company sells high-quality leggings, tops, and accessories for both women and men through stores and e-commerce channels. Lululemon also boasts a 30 million–member loyalty program and a growing global presence across North America, Europe, and Asia.
Today, Lululemon carries a market capitalization near $19 billion, roughly half of what it was a year ago. The sharp decline reflects several headwinds — from stagnating U.S. same-store sales to the end of the de minimis tariff waiver and heavier competition from brands like Nike (NYSE:NKE) and Adidas (OTC:ADDYY).
Despite the slump, Lululemon stock now trades at appealing valuations. Its forward price-to-earnings (P/E) ratio of roughly 11x is well below the consumer cyclical sector’s 19x median. Its EV/EBITDA multiple sits near 7x, undercutting peers that trade around 9x. With multiples sitting below both industry and historical averages, long-term investors may see potential for a rebound if growth stabilizes.
Q2 Earnings Show Mixed Signals
Lululemon’s Q2 2025 results revealed modest growth alongside emerging challenges. Revenue rose 7% year-over-year to $2.5 billion, narrowly missing estimates by $14.8 million. U.S. sales grew just 1%, but China jumped 25% and other international markets climbed 19%.
Net income came in at $371 million, down from $393 million a year earlier, with diluted EPS of $3.10. Free cash flow stood at $150.8 million, and the company ended the quarter with $1.16 billion in cash and 784 stores worldwide.
Management took a cautious approach for the rest of the year, guiding Q3 revenue between $2.47 and $2.50 billion and EPS between $2.18 and $2.23. For full-year 2025, the company projects 2–4% sales growth to around $10.85–$11 billion, implying EPS of $12.77–$12.97. Analysts, however, remain more optimistic, forecasting EPS near $14.36 if consumer sentiment improves.
Recent Developments and Outlook
In late October, Lululemon announced a partnership with Fanatics to launch NFL-branded apparel — a strategic move that briefly lifted shares by 3%. The deal expands Lululemon’s exposure to men’s sportswear and broadens its reach beyond yoga and athleisure.
However, caution persists as U.S. sales soften and competition intensifies. Working capital fell 15.7% year-over-year, while management signaled plans to scale back share buybacks to preserve liquidity amid uncertainty.
Lululemon’s focus on product innovation, international expansion, and digital growth remains central to its recovery plan. With strong brand equity and global recognition, the company could stabilize margins once short-term tariff and cost pressures ease.
Analysts’ Opinions on Lululemon Stock
Wall Street remains divided. Goldman Sachs (NYSE:GS) cut its price target to $200, citing margin compression, while Morgan Stanley (NYSE:MS) and Bank of America (NYSE:BAC) each trimmed their targets to $185, highlighting slowing growth and rising costs.
Overall, analysts rate LULU stock a “Hold” with an average price target of $189, implying a potential 15% upside. Many agree that the stock’s current valuation already reflects the worst-case scenario, and any surprise rebound in U.S. sales could quickly reverse sentiment.
Should You Buy Lululemon Stock Now?
Michael Burry’s decision to double down on Lululemon stock reflects confidence in the brand’s long-term fundamentals despite near-term challenges. With a powerful global footprint, resilient customer loyalty, and a strong balance sheet, Lululemon remains a premium player in a competitive space.
For investors with patience and a long-term view, Lululemon stock’s depressed valuation may offer an attractive entry point — but the recovery could take time. If management can reignite growth in the U.S. while expanding abroad, this could be one of 2026’s strongest comeback stories.
Featured Image: Unsplash @ Marco Tjokro
Author Stephanie Bédard-Châteauneuf 
