Michael Burry Buys Lululemon Stock as LULU Faces Headwinds and Legal Pressure
Michael Burry has repurchased shares of Lululemon Athletica Inc. following recent price drops, even as the retailer faces cautious analyst ratings and pending shareholder lawsuits.
Prominent investor Michael Burry announced on Wednesday that he repurchased shares of Lululemon Athletica Inc. after the stock declined into the $106 range. Burry explained that he viewed the move as an opportunity driven by temporary market neglect rather than permanent harm to the business. He had previously sold his holding in early October to capture a tax loss, with the goal of buying back in once the wash-sale window expired.
The apparel company has been dealing with steep earnings pressure alongside significant leadership turnover. In early September, former Nike executive Heidi O'Neill took over as chief executive. O'Neill quickly reshuffled the top corporate ranks, installing new leaders across brand management, product development, strategy, and operations to improve company execution.
The executive changes follow difficult financial results for the second quarter of fiscal 2026. Lululemon reported revenue of $2.42 billion, down from the prior year, while sales of signature leggings dropped around 20%. The retailer also cut its full-year guidance, projecting a 5% to 7% decline in revenue and diluted earnings per share between $9.48 and $9.73, well down from $13.26 recorded in the previous year.
Wall Street has maintained a cautious stance on the stock. Analysts at Cantor Fitzgerald initiated coverage on Tuesday with a neutral rating and a price target of $121.00. According to MarketBeat, the wider consensus rating sits at Reduce with an average price target of $105.92, supported by 23 Hold ratings and seven Sell ratings against just one Strong Buy rating.
Lululemon is also defending against investor class action lawsuits filed in federal court. Law firms including Bleichmar Fonti & Auld LLP and Levi & Korsinsky, LLP noted that shareholders who purchased stock between March 18, 2026, and September 3, 2026, have until January 4, 2027, to seek lead plaintiff status. The complaints allege that the company made false or misleading disclosures concerning retail foot traffic, product demand, and sales in mainland China before lowering its financial forecasts.