Michael Burry
· Cassandra Unchained
· September 04, 2026 at 09:12
· ⏱ 1 min read
| Read on Substack ↗
Summary
Lululemon's fundamentals have deteriorated more than headline results show: global comps fell 9%, leggings were down 20%, operating margin was guided to mid-single digits, and the earnings beat was flattered by tariff timing benefits. This argues for a lower fair value/risk-adjusted outlook for LULU unless operating trends improve.
•LULU's global comparable sales were -9% in the period.
•Both China and the US showed negative growth despite US store expansion.
•Leggings sales were down 20%.
•Operating margin was guided to the mid-single digits, signaling sustained compression.
•The headline earnings beat was actually a sizable miss after adjusting for repeated tariff-related benefits.
Read time1 min
Length639 chars
Categoryfinance
Ideas
Michael BurryFounder, Scion Asset Management; subject of The Big Short
The author catalogs concrete deterioration at LULU — negative China/US growth, -9% global comps, -20% leggings, mid-single-digit operating margin guidance, and a tariff-inflated beat — suggesting intr
The author catalogs concrete deterioration at LULU — negative China/US growth, -9% global comps, -20% leggings, mid-single-digit operating margin guidance, and a tariff-inflated beat — suggesting intrinsic value has fallen. This is limiting data rather than an explicit short call.
Risk: The warning contains no explicit position, valuation target, or timeframe; if market expectations have already adjusted, the downside may be limited.
This newsletter, published September 04, 2026,
features Michael Burry
discussing LULU.
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