Core Insights - Michael Burry, known for his contrarian investment strategies, has recently closed his hedge fund, Scion Asset Management, allowing him to share investment advice freely [2] - Burry identifies opportunities in the current market, particularly in companies that have been oversold due to year-end practices like window dressing and tax-loss harvesting [3] - Lululemon Athletica (LULU) is highlighted as a potential investment despite its stock being down over 50% this year, with Burry suggesting it is at least a hold for the next three to five years [3] Company Overview - Lululemon Athletica is a Vancouver-based company specializing in athletic apparel primarily for women and girls, offering a range of products including fitness pants, shorts, tops, and jackets [4] - The company has a current market capitalization of $21.6 billion [4] Stock Performance - Lululemon's stock has decreased by 52% year-to-date, underperforming the S&P 500 Index, which is up 17%, and the consumer discretionary sector, which is up 5% [5] - The stock is trading at a trailing price-earnings ratio of 12.4x, significantly lower than its five-year mean of 46.8x, indicating that it is exceptionally cheap at present [6]

Company Overview - Lululemon Athletica Inc. is headquartered in Vancouver, Canada, and specializes in designing, distributing, and retailing athletic apparel, footwear, and accessories for both women and men under the lululemon brand, with a market cap of $20.2 billion [1] Stock Performance - Lululemon's shares have significantly underperformed the broader market, declining 48.3% over the past year, while the S&P 500 Index has increased by nearly 13.2% [2] - In 2025, Lululemon stock is down 55.4%, contrasting with the S&P 500's 14.5% rise on a year-to-date basis [2] Competitive Analysis - Compared to the VanEck Retail ETF, which has gained about 10.7% over the past year, Lululemon's underperformance is evident, with the ETF's 11.5% returns on a year-to-date basis further highlighting Lululemon's losses [3] Challenges Faced - The company's underperformance is attributed to slowing growth in North America, compressed profit margins due to higher tariff rates, and increased competition in the athleisure market [4] - Lululemon's product pipeline has not resonated well with customers, leading to decreased enthusiasm and spending, which, along with rising costs, has forced the company to lower its revenue and earnings outlook [4] Financial Results - On September 4, Lululemon reported Q2 results, with an EPS of $3.10, exceeding Wall Street expectations of $2.84, and revenue of $2.5 billion, meeting forecasts [5] - For the current fiscal year ending in December, analysts expect Lululemon's EPS to decline by 11.8% to $12.91 on a diluted basis [6] Analyst Consensus - Among the 30 analysts covering Lululemon stock, the consensus rating is a "Hold," consisting of three "Strong Buy" ratings, 24 "Holds," two "Moderate Sells," and one "Strong Sell" [6] - The current analyst configuration is less bullish than a month ago, with four analysts suggesting a "Strong Buy" and three advising a "Strong Sell" [7]