Burry Vows To Buy Lululemon Below $100

The Big Short investor holds his largest position through a guide cut and a CEO handoff, betting dislocation over permanent erosion.

Lululemon reported second quarter fiscal 2026 revenue of $2.42 billion on Sept 3, down 4 percent year over year, with comparable sales down 9 percent. Americas revenue fell 8 percent with comparable sales down 12 percent, operating income fell 13 percent to $453.7 million, and diluted earnings were $2.92 including $0.86 from tariff refunds. The company cut fiscal 2026 revenue to $10.35 billion to $10.50 billion, down 5 to 7 percent, and earnings to $9.48 to $9.73, with third quarter revenue guided down 10 to 11 percent. Shares closed at $100.61 on Sept 4, down 17.38 percent, about 80 percent below the $511.29 close of Dec 29 2023. Burry said the holding is 17.4 percent of disclosed longs tracked in September and that he will buy more below $100.

For holders, the debate is whether the market is pricing a temporary execution miss as permanent loss of earnings power. The brand still printed 60.5 percent gross margin and repurchased 2.7 million shares for $330 million in the quarter. The bear case is concentration in North America weakness, softer China, and product response that management said lacked halo effect. Burry sides with dislocation, noting prior Lululemon stress periods and scope for a product and brand reset.

Focus shifts to incoming chief executive Heidi O'Neill, who starts Sept 8 after more than 25 years at Nike in product, brand and digital roles. Watch Americas comparable sales, full price demand, inventory discipline, and operating margin under higher marketing spend. Any stabilization in traffic or second half product response would support the double down thesis, while another comp decline would extend the drawdown from his 2025 build.