Lululemon Athletica Inc., together with its subsidiaries, designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men. It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle, such as yoga, running, training, and other activities. It also provides fitness- inspired accessories and footwear. The company sells its products through a chain of company-operated stores; outlets; interactive workout platform; yoga and fitness studios, university campus retailers, and other partners; license and supply arrangements; recommerce; and temporary locations, as well as through mobile apps and lululemon.com e-commerce website. It has operations in the United States, the People's Republic of China, Canada, Australia, the United Kingdom, South Korea, Germany, New Zealand, Singapore, Japan, France, Ireland, Spain, Malaysia, Sweden, the Netherlands, Norway, and Switzerland. The company was founded in 1998 and is based in Vancouver, Canada.

Lululemon looks financially solid, but no longer as dynamic a story as it once was. The company has almost no debt burden: debt/equity and long-term debt are both zero, and liquidity is comfortable — current ratio 2.23 and quick ratio 1.29 — which reduces valuation risk. At the same time, profitability remains high relative to the industry: ROE of 31.27%, ROA of 17.99%, operating margin of 18.29%, and net margin of 13.03% are noticeably above the median, confirming a strong operating model. However, the year-over-year trend is deteriorating: margin, ROE, ROA, EBITDA, and operating profit are all steadily declining from last year’s higher levels, which usually limits re-rating potential. Revenue and earnings also look weaker in terms of trajectory: revenue and net income are below peak levels, and EBITDA has fallen noticeably, indicating pressure on growth rates and efficiency. On the multiples side, the picture is mixed: P/E of 9.72 looks cheap relative to the industry, but P/S of 1.27 and P/B of 2.80 are above the median, meaning the market is still paying a premium for balance sheet quality and the brand. P/FCF of 10.99 is below the industry benchmark, which supports the valuation, but does not fully offset the deterioration in operating momentum. The absence of dividends removes one of the potential support factors for an investor. Overall, the company remains high-quality and financially resilient, but slowing growth and margin compression make the current valuation less convincing for aggressive upside. Therefore, the target forecast should be moderately lowered, while maintaining a conservative 1-year outlook. For an investor, this is more a story of resilience and business quality than of rapid share price growth.

lululemon athletica inc.

Сильный индекс, значительно упал. Оптимистичный взгляд на свои позиции резко сменился на неуверенность.

Strong index, significantly down. An optimistic view of his position suddenly changed to uncertainty.

Сильный индекс, без изменений. Рынок не поддерживает быков.

Strong index, flat. The market does not support the bulls.

Слабый индекс, незначительно вырос

Lululemon’s strong balance sheet and high profitability are combined with slowing growth and margins, so the valuation should be moderately lowered.

Lululemon (NASDAQ: LULU) reported quarterly financial results that disappointed investors.
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*Stock prices used were the afternoon prices of Sept. 8, 2026. The video was published on Sept. 10, 2026.
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Parkev Tatevosian, CFA has positions in Lululemon Athletica Inc. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Why is Lululemon Stock Crashing, and is it a Generational Buying Opportunity?

Key Points
Michael Burry says Lululemon is now the largest position in his portfolio.
Lululemon has cut its full-year earnings guidance twice this year, most recently to between $9.48 and $9.73 per share.
Comparable sales fell 9% year over year in the fiscal second quarter.
Lululemon Athletica (NASDAQ:LULU) stock closed at $96.88 on Thursday, touching a fresh 52-week low during the session. Shares now trade below $100 for the first time in more than eight years.
The latest leg down came after the athletic-apparel retailer cut its full-year outlook for the second time this year alongside last week's earnings report. Together, they sent the stock down 17% in a day.
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Michael Burry sees an opportunity. The famed investor wrote on Substack the evening the report landed that Lululemon is now the largest position in his portfolio.
In a follow-up note the next day, he reportedly called the stock a fat pitch below $100 and said he plans to buy more. By his estimate, the stock could return 15% to 20% annually over the next 15 to 20 years if the brand regains its footing.
Those are bold numbers for a business whose sales are falling. But at about 10 times the midpoint of this year's guided earnings, the projection deserves a closer look.
Image source: Getty Images.
Cash and buybacks
Burry disclosed a full-sized stake in the spring, and Lululemon's financial strength is central to his case. Lululemon ended the fiscal second quarter of 2026 (the period ended Aug. 2, 2026) with nearly $1.4 billion in cash and no debt on its balance sheet.
The company is also buying back stock while it is down: 2.7 million shares for $330 million during the fiscal second quarter, more than 2% of all its shares in three months. And each dollar spent goes further as the stock falls. Lululemon's guided earnings for this year now equal nearly 10% of its share price.
What would 15% a year require?
From about $97 a share, a 15% annual return over 15 years puts the stock near $790. At the top of Burry's range, 20% a year for 20 years, shares would top $3,700 -- nearly 40 times today's price.
If the stock's price-to-earnings multiple stayed at about 10, earnings per share would have to compound at those same rates -- heroic for a company whose earnings are guided to fall this year. But earnings don't have to do all the work. If the price-to-earnings multiple simply doubled to 20 times earnings over 15 years, that change alone would add almost 5% a year. Additionally, profits recycled into buybacks at today's valuation could grow earnings per share at a high-single-digit rate even if total profit never grew. With even modest growth on top, the bottom of Burry's range arguably comes within reach.
In other words, I think the bet doesn't need Lululemon to become a growth story again. It needs earnings to stop falling.
Sales are still shrinking
That condition is the problem right now. Showing how quickly demand has deteriorated, comparable sales decelerated from 3% growth in the final quarter of fiscal 2025 to 1% growth in this year's fiscal first quarter, then swung to a 9% decline in the fiscal second quarter. Americas comparable sales fell 12% in the latest period. Further, the revenue decline is accelerating. Revenue fell 4% in the fiscal second quarter, and management expects a drop of 10% to 11% year over year in the fiscal third quarter.
Earnings guidance has followed the same path. March's initial outlook called for earnings per share of $12.10 to $12.30. June's cut took the range to $10.95 to $11.15.
Now it is $9.48 to $9.73. Since Lululemon earned $13.26 per share last year, the new midpoint implies a decline of about 28%.
Even the second quarter's reported $2.92 in earnings per share leaned on one-time help. Tariff refunds of $134.5 million, plus associated interest, added $0.86 to the figure. Without that boost, earnings would have fallen by about a third year over year.
Burry read the report the same way. He wrote that things had clearly changed for the worse, and that the headline earnings beat amounted to a big miss once the tariff benefit was accounted for.
Of course, new CEO Heidi O'Neill, a Nike veteran of more than 25 years, took over this week. But her impact isn't showing up in the numbers yet.
Does Burry's math hold up at today's price? Much of it does. The cash, the buybacks, and the low price-to-earnings multiple all support his case, and I believe he is right that the stock could deliver strong returns without recapturing its former growth rate.
However, his return estimate leans on the brand finding its footing. And every recent number says it hasn't found it yet. I'm not buying alongside him today. If comparable sales stop sliding, I would consider changing my mind.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
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Michael Burry Likes Lululemon Stock. But the Math Only Works If Sales Stop Shrinking.

Several well-known athletic apparel companies, namely NIKE NKE and lululemon LULU, have seen an extended period of poor share performance, both widely underperforming and reflecting some of the biggest laggards in the S&P 500.
Lululemon Cuts Guidance
LULU shares have faced pressure amid weakening trends in its consumer base, particularly in North America. Quarterly results have highlighted the pressure, with revenues in the broader Americas region down 8% YoY and comparable sales in the region down 12% in its latest quarterly release. The company also lowered its full-year guidance, helping explain the post-earnings plunge.
Lululemon’s YoY sales growth rates were fantastic in recent years before tapering off visibly, with the weak price action fully reflecting the growth cooldown. Please note that the chart below tracks the YoY % change in sales, not actual sales numbers.
The weak results have led to a very bearish earnings outlook, with EPS expectations slashed across the board amid the guidance cut driven by consistently weak quarterly results. The stock remains a Zacks Rank #5 (Strong Sell), and investors would likely be better off staying on the sidelines until the earnings picture shifts positively, which could finally reignite momentum for the beaten-down stock.
Image Source: Zacks Investment Research
Can NIKE Earnings Turn Things Around?
NIKE shares have been weak for several reasons, largely because it hasn't impressed consumers in recent years and the loss of precious shelf space it once had. Competitors have put real pressure on NIKE amid shifting consumer preferences, adding to the tough environment.
NIKE’s direct-to-consumer (DTC) push a few years back has largely backfired, reducing shelf space and eroding its overall presence. Still, it has been actively rebuilding its relationships with retailers, but regaining the premium shelf space it once enjoyed isn't cheap, and the process does take quite a bit of time.
Sales growth has been quite weak over recent years, reflective of the above-mentioned issues and a big reason for the poor share performance.
The company will report its next set of results relatively soon, near the beginning of October. EPS and sales revisions for the period have been stabilizing in recent months, reflecting at least a small level of positivity heading into the release. That said, growth is still expected to remain in a slump, with consensus estimates suggesting 10% lower earnings on 2% lower sales.
Bottom Line
While lululemon LULU and NIKE NKE shares may look like a discounted opportunity, the reality remains that they’ve faced big issues concerning their consumer bases. Shifting preferences have led to weak quarterly results, and share performance reflects those problems. A turnaround can definitely be in store for each, but results have yet to truly prove a strengthening picture.
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Shifting Consumer Preferences Continue to Impact NKE and LULU

In early trading on Wednesday, shares of Honeywell International topped the list of the day's best performing components of the S&P 500 index, trading up 7.5%. Year to date, Honeywell International registers a 42.2% gain.
And the worst performing S&P 500 component thus far on the day is Casey's General Stores, trading down 15.4%. Casey's General Stores is showing a gain of 12.2% looking at the year to date performance.
Two other components making moves today are lululemon athletica, trading down 4.8%, and Meta Platforms, trading up 5.2% on the day.

S&P 500 Movers: CASY, HONIV

NIKE Inc. NKE is showing early signs of improvement in Greater China, but the market remains one of the biggest challenges in its broader turnaround. Fourth-quarter fiscal 2026 revenues in Greater China declined 17% year over year, with NIKE Direct down 14%, Digital falling 25%, and wholesale revenues decreasing 19%. EBIT also dropped 20%. Still, management pointed to sequentially better in-season sell-through, lower average retail discounts and improving full-price realization on digital following aggressive promotional reductions over the past two quarters.
NIKE is beginning to see traction where it has emphasized sport and elevated retail experiences. Running revenues increased mid-single digits, while Global Football and Tennis grew double digits. The Shanghai House of Innovation delivered double-digit growth, while recently reset retail doors also registered sales gains. NIKE is investing further in premium online and offline storefronts, deeper local partnerships and territory-level consumer engagement. Its Greater China product-creation team is also expected to deliver locally designed, developed and manufactured products beginning in holiday 2027.
However, the numbers suggest that China’s recovery is still at an early stage rather than fully established. NIKE continues to reduce inventory and clean up aged merchandise, with Greater China inventory and units both down double digits in the quarter. Management expects near-term revenue trends to remain broadly in line with recent performance, signaling that a meaningful sales rebound may take time. While improving full-price sales, stronger performance categories and better results at elevated doors offer positive indicators, sustained recovery will depend on whether NIKE can translate its marketplace reset and more locally relevant strategy into broader demand growth.
How Are adidas & lululemon Navigating China’s Market?
adidas AG ADDYY and lululemon athletica inc. LULU are NKE’s key competitors in theglobal market
ADDYY is displaying much stronger momentum in Greater China, suggesting that the market has evolved into an important growth engine for the company. In second-quarter 2026, currency-neutral revenues in Greater China increased 15% year over year, following 17% growth in the first quarter. For the first half, sales advanced 16%, reflecting continued market-share gains. adidas is benefiting from strong consumer demand, improved product sell-through and a greater emphasis on locally relevant offerings. The company’s localized product strategy, including designs developed for Chinese consumers, is also helping strengthen brand appeal. With DTC sales growing at double-digit rates across markets and adidas maintaining its focus on full-price selling, China currently represents a notably healthier growth story than NIKE’s ongoing marketplace reset.
Meanwhile, LULU is seeing a more mixed picture in China after previously generating robust growth. China Mainland revenues increased 4% year over year in second-quarter fiscal 2026 on a reported basis but declined 2% in constant dollars. Comparable sales fell 2% reported and 8% on a constant-dollar basis, marking a sharp slowdown from the first quarter, when China Mainland comparable sales had risen 13% in constant dollars. The moderation suggests that China remains an important international opportunity for lululemon, but recent demand trends have become less supportive. With the Americas also under pressure, renewed momentum in China would be particularly important for sustaining the company’s international growth trajectory.
NKE’s Price Performance, Valuation & Estimates
Shares of NIKE have lost 11.2% in the past three months compared with the industry’s decline of 11.1%.
From a valuation standpoint, NKE trades at a forward 12-month price-to-earnings ratio of 20.17X compared with the industry’s average of 17.78X.
The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year decline of 30.1%, while that for fiscal 2027 indicates growth of 24.6%. The company’s EPS estimates for fiscal 2026 and 2027 have been stable in the past 30 days.
NIKE stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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NIKE's China Business: Recovery Story or Ongoing Challenge?

Key Points
Lululemon is facing a myriad of problems as its new CEO takes over.
The stock is cheap, but a turnaround will likely take several years at a minimum.
Ahead of Lululemon's (NASDAQ: LULU) fiscal Q2 earnings report, I wrote an article published on Aug. 26 that said the stock looked like a value trap and that the warning from Dick's Sporting Goods would likely spill over and impact it as well. The stock subsequently plunged 17% on Sept. 4, in the session following its earnings report, as the athleisure company reported disappointing results and cut its full-year outlook. The stock has now lost more than half its value this year and nearly three-quarters of its value over the past five years.
Let's dive into the yoga brand's latest results and prospects to see what could come next for the once-high-flying apparel stock.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Troubles continue
Unfortunately for Lululemon, cutting guidance has become commonplace. For the fourth time since last June, it slashed its full-year outlook. It now expects revenue to decline by 7% to 5% to between $10.35 billion and $10.5 billion, down from prior expectations for sales in a range of $11 billion to $11.15 billion. Full-year adjusted EPS is projected to be between $9.48 and $9.73, but that includes a $0.86 tariff refund. Earlier, it guided to adjusted EPS of $10.95 to $11.15 without a tariff refund.
The company's Q2 results were pretty dreadful, and it looks like things are only worsening. Management noted everything from negative social media commentary to weak responses to new product launches to increased competition and brand deterioration.
Overall, the company's Q2 revenue fell 4% year over year to $2.42 billion, missing the $2.46 billion consensus estimate. Adjusted earnings per share (EPS) plunged 34% to $2.01, but were above the $1.79 consensus.
The underlying numbers were even worse. Americas revenue sank 8%, while same-store sales plunged 12%. International revenue rose 4%, but only 2% in constant currencies, while comparable sales in constant currencies slipped 6%.
China had long been a bright spot for Lululemon, but revenue fell 2% in constant currencies while same-store sales dropped 8% excluding foreign currency movements. The company said it was impacted by negative brand sentiment, which shouldn't be surprising given its big PR gaffe in China when, at an important yoga event held on the Great Wall, it inadvertently gave a Chinese actor a Japanese taiko drum to play instead of a Chinese dagu drum. Rest-of-world sales rose 6% in constant currencies, but comparable-store sales on the same basis dropped 6%.
Gross margin decreased by 200 basis points to 60.5%, but it would have been down 360 basis points when excluding the tariff refund.
Inventory was basically flat year over year, and it is doing a decent job of keeping this in check. This is an important metric to monitor for struggling brands, as big increases above sales growth can lead to more markdowns and sales.
Looking ahead, things will start getting worse for the company just as its new CEO takes over. While it is not uncommon to set a low bar when a new CEO or CFO comes on board, the company still projected a pretty meaningful sales decline. It expects Q3 revenue to decline by 10% to 11% to between $2.290 billion and $2.320 billion. Adjusted EPS is expected to fall to between $0.93 and $0.98 for the quarter, versus $2.59 a year ago.
Is the stock a buy on the dip?
While Lululemon stock looks cheap, now trading at a forward price-to-earnings (P/E) ratio of around 9 times this year's and next year's analyst estimates, the stock looks like it is set to fall into the same trap as other once very popular athletic apparel brands like Nike and Under Armour. The brand has lost its luster and faces increased competition, and, quite frankly, from my viewpoint, the athleisure fashion trend is shifting. I was recently eating lunch at Panera, and nearly everyone was wearing jeans. That is not something you would have seen a few years ago.
As such, this is a stock I'd still stay far away from, and it will likely take at least several years for a potential turnaround.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,413,876!*
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Lululemon Athletica Inc. and Under Armour. The Motley Fool has a disclosure policy.

I Predicted That Lululemon Stock Was In Trouble Ahead of Earnings. What's Next After Its 17% Drop?

Key Points
Fashion trends are shifting away from Lululemon's core offerings.
Operational missteps are compounding the problem.
Shares of Lululemon Athletica (NASDAQ: LULU) plummeted on Friday after the athletic clothing maker slashed its full-year profit forecast.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Sales shortfall
Lululemon's net revenue declined 4% year over year to $2.4 billion in its fiscal second quarter, which ended on Aug. 2.
The retailer opened 11 new company-operated stores and closed two during the quarter, bringing its total to 825 locations.
Yet its comparable sales, which measure revenue at stores and direct-to-consumer e-commerce sites open for at least a year, fell 9%.
Shifting trends
To the heartbreak of many, Lululemon's famed leggings appear to be going out of style.
"We remain committed to the category, but there are shifts occurring with guests looking for away-from-body silhouettes," interim co-CEO Meghan Frank said during a conference call with analysts.
Worse still, Lululemon is losing market share to rivals like Alo Yoga, according to retail intelligence provider PassBy.
In all, Lululemon's leggings sales sank roughly 20% in the second quarter.
Lululemon's operating income, in turn, dropped 13% to $453.7 million. The decline would have been even steeper if not for $134.5 million in tariff refunds.
All told, the beleaguered company's earnings per share, which were propped up by stock buybacks, decreased 6% to $2.92.
Turnaround efforts are likely to take time
Management sees more declines ahead. Lululemon expects its third-quarter net revenue to shrink by more than 10% to $2.3 billion.
Investors were also disheartened to see Lululemon cut its full-year earnings per share guidance to $9.48 to $9.73, down from a prior forecast of $10.95 to $11.15.
Incoming CEO Heidi O'Neill, a former Nike executive, will be facing quite a challenge when she takes the helm of the struggling apparel designer on Sept. 8.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $445,833!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,402,153!*
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*Stock Advisor returns as of September 4, 2026.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Why Lululemon Stock Crashed Today

Lululemon Athletica (NASDAQ:LULU), a premium yoga-inspired athletic apparel company, closed at $100.61, down 17.38%. Shares fell after the company cut its full-year revenue and earnings outlook again, and investors will be watching to see how effectively the new CEO can turn things around.
Trading volume reached 37.1 million shares, coming in about 1,000% above its three-month average of 3.37 million shares. Lululemon IPO'd in 2007 and has grown 704% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) closed at 7,718, down 0.38%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) finished at 26,507, down 0.29%. In athletic apparel stocks, Nike (NYSE:NKE) closed at $38.40, down 0.95%, while Deckers Outdoor (NYSE:DECK) closed at $85.81, up 1.55%, offering a mixed read on premium brand demand.
What this means for investors
Lululemon's woes went from bad to worse today as the already-struggling stock cratered. Q2 net revenue fell 4% to $2.4 billion year-on-year, and the firm expects its Q3 revenue to be between $2.29 billion and $2.320 billion -- down around 10% on the year before. Today's falling revenue and guidance cut follow several difficult years, and the stock has fallen over 51% year-to-date.
One significant issue for Lululemon is that it has had two interim Chief Executive Officers for over seven months. The incoming CEO, Heidi O'Neill, is due to take the helm this month, but such a long period of placeholder leadership is bound to have an impact, particularly at a time when the firm needed to make a decisive turnaround.
Analysts, including JPMorgan, lowered their price targets for the stock as concern grew that recovery would take time. Lululemon remains a recognizable brand, but it is losing market share, and O'Neill will have her work cut out to reinvigorate the sportswear maker's sales.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $445,833!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,402,153!*
Now, it’s worth noting Stock Advisor’s total average return is 993% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
JPMorgan Chase is an advertising partner of Motley Fool Money. Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor, JPMorgan Chase, and Nike. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.

Stock Market Today, Sept. 4: Lululemon Plummets 17% After Slashing Guidance

Key Points
The company just reported another dismal quarter.
Lululemon once again lowered its full-year outlook.
The brand continues to struggle on a reputational level, while concerns about a stale product line also persist.
Investing is hard, even for some of the best in the business.
Dr. Michael Burry made a name for himself successfully betting against the housing market before it collapsed during the Great Recession. This series of events was portrayed in the well-known movie, "The Big Short," in which actor Christian Bale portrayed Burry.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Since then, Burry has run his own hedge fund and now runs a very popular Substack publication, where he shares his thoughts on the market and how he is investing his personal wealth.
This year, Burry's largest position, Lululemon (NASDAQ:LULU), has been crushed, down over 52%. The company recently reported abysmal earnings, sending its stock down nearly 18%, as of 12:36 p.m. ET on Sept. 4.
Should investors sell the stock?
Image source: Getty Images.
A tough year continued by a tough quarter
In the first quarter of Lululemon's fiscal year 2026, the company lowered its full-year guidance due to weak sales in North America and negative sentiment stemming from poorly perceived promotional campaigns.
In the recently reported second quarter, the company posted adjusted earnings per share of $2.06, handily beating Wall Street's expectations. However, revenue of $2.42 billion slightly missed consensus estimates, with comparable sales falling 9% year over year.
But what is even more concerning is that the luxury apparel maker once again significantly slashed its full-year outlook. Full-year revenue was expected to be in the range of $11 billion to $11.15 billion.
Now, management is calling for net revenue inside a range of $10.35 billion to $10.5 billion, reflecting a 5% to 7% annual decline. The kicker: the new outlook includes tariff refunds.
"Today, lululemon (LULU) is the trickster in my portfolio," Burry wrote in a Substack note. "This time the trickster is my largest position, and it does seem determined to take me where mermaids fear to tread."
For the second quarter in a row, Lululemon attributed struggles to "negative commentary," according to interim CEO Meghan Frank, who also cited a larger-than-anticipated decline in sales of some of its most critical categories, such as leggings.
Gross margins actually increased 2% year over year to 60.5%, although they would have been 54.9%, excluding the positive lift from tariff refunds.
Should investors sell the stock?
Wall Street analysts are all over the map with Lululemon. Following the report, analysts at BNP Paribas slashed their price target by 50% to $44 per share and maintained an underperform rating on the stock.
The stock currently trades around $100 per share, which is essentially the average price target among analysts who have issued research reports on the company over the past three months, according to TipRanks.
While Burry noted that the company's performance has been frustrating, he also said he remains invested and would buy more if the stock slipped below $100.
Lululemon has struggled due to the issues mentioned above, as well as sluggish sales in the Americas and weaker-than-expected growth in China. There's also been significant competition and complaints that the clothing has become stale.
An issue that I'm struggling with is that consumer spending hasn't exactly slowed this year. Real private domestic final purchases increased 3% in the first half of the year, and unemployment remains at 4.1%.
While issues at Lululemon remain company-specific, I do worry what would happen to sales should the economy show greater weakness.
However, for bulls like Burry, Lululemon is still generating strong gross margins and has a new CEO about to take over, which could rejuvenate the company's strategic direction. The stock also now trades at just over 9 times forward earnings.
So a higher safety buffer may now be priced in. But it can be tough to catch a falling knife; the brand continues to suffer, and I would be worried about what might happen to sales should the economy weaken further.
At this point, I'm more prone to keep this on the watch list or take a smaller, more speculative position.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $445,833!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,402,153!*
Now, it’s worth noting Stock Advisor’s total average return is 993% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.

The 'Big Short's' Michael Burry Has Seen His Largest Position Fall Over 50% This Year. Should Investors Sell the Stock?

As of 11:37 AM ET, the Dow Jones Industrial Average (DJINDICES:^DJI) is down 0.67% to 53,325.23, the S&P 500 (SNPINDEX:^GSPC) has slipped 0.50% to 7,708.89, and the Nasdaq Composite (NASDAQINDEX:^IXIC) is trading 0.44% lower at 26,467.18 as a surprisingly strong employment report sparks renewed interest rate anxiety.
Gold is down 1.15% to $4,487.60, while the 10-Year Treasury yield has risen 1 basis point to to 4.77%. Utilities is the only sector in the green, while consumer cyclicals and communication services saw the biggest declines.
Today's biggest moves
Lululemon Athletica tumbled 18% on news of declining revenue and a cut to its outlook. Memory stocks, such as Sandisk and Micron Technology, gained despite broader stock market losses. Fair Isaac (NYSE:FICO) plummeted following pricing criticism on social media from the Federal Housing Finance Agency.
What this means for investors
Yesterday's optimism that the Federal Reserve might not raise rates when it meets later this month was swiftly dashed today as U.S. job growth surged, beating expectations. The economy added 162,000 jobs in August, despite geopolitical tensions and inflation pressure.
On the face of it, that strength is good news for the economy. However, stocks fell because a rate hike is now more likely: The Fed's dual mandates are maximum employment and price stability, and if things are OK on the employment front, it has more leeway to raise rates to bring down inflation.
For investors, the big lesson to take from both yesterday's gains and today's losses is this: Sentiment can shift with each new economic report, so try to tune out the noise. Instead, focus on companies with strong fundamentals that you plan to hold for five years or more.
Should you buy stock in S&P 500 Index right now?
Before you buy stock in S&P 500 Index, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $445,833!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,402,153!*
Now, it’s worth noting Stock Advisor’s total average return is 993% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 4, 2026.
Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool recommends Fair Isaac and Lululemon Athletica Inc. The Motley Fool has a disclosure policy.