Michael Burry Has 38% of His Portfolio in Lululemon: Time To Wear The Pants?

NASDAQ: LULU — $210.81 +$3.00 (+1.44%) — As of Jan-02-2026 4:00:00 PM ET
FunStock Index™: 8.3 / 10 🎯
Translation: high-quality brand + real turnaround setup + valuation finally doing yoga (stretching the right way).

Lululemon. The company that turned “going to yoga” into a full lifestyle and “running errands” into a sport requiring premium fabric engineering. 🧘♀️👟 And now, after a long stock cool-down, the question is no longer “Is LULU expensive?” but “Is LULU… interesting again?”

Because Trigger #1 just walked into the fitting room: Michael Burry’s Scion Capital owns 38.6% of its portfolio in Lululemon (avg buy price $238.01, current price around $211-ish), and he increased shares 100% in Q3 2025. 🕶️📈

He may not be betting the house… but he’s definitely betting the store. 
Or is he?

Let’s FUN-alize the setup, keep perspective, and decide whether it’s time to stop window-shopping and actually… wear the pants.

🧵 First: What Is Lululemon, Really?

lululemon athletica inc. designs, distributes, and sells technical athletic apparel, footwear, and accessories across the Americas and internationally — including a growing presence in China and broader international markets. It sells through stores, pop-ups, outlets, e-commerce, and even re-commerce (“Like New”). Translation: it’s not just yoga pants — it’s a premium athletic lifestyle platform. 🧢👜🌍

🧨 Disclosure: We’ve Been Here Before (Slightly Bullish… in Shorts)

We wrote a very slightly bullish piece back in June 2025 and concluded:

“💥 Final Pose: Is This Downward Dog Worth Fetching?
The stock may have just rerated to something resembling buyable…
🩳 Speaking of which: 5% short interest…
📛 Disclaimer: We own shorts. Not stock. Or yoga pants.”

Now the stock has continued to reset, the narrative has matured, and the valuation looks less like “premium athleisure” and more like “premium… opportunity?” 👀

So yes: now might be the time to seriously consider adding — if you accept the risks and the timeline.

🎯 Trigger #1 — Burry’s Big Bet (But Keep Perspective)

Burry’s allocation looks massive within Scion, but his position size in dollars is still relatively modest compared to mega-holders:

• 🐘 BlackRock: $1.9B

• 🦁 Ken Griffin: $217.1M

• 🕶️ Michael Burry: $21.3M (numbers fluctuate, beware)

So: he’s not buying the whole collection… but he’s absolutely not just browsing the clearance rack either. ✅

🧱 Trigger #2 — Institutions Are the Anchor

You’ve got institutional ownership around ~81%, and float held by institutions around ~85%. That’s not hype money. That’s “we’re here for the long haul” money. 🏦⚓

Top holders include Vanguard, BlackRock, State Street, Fidelity, etc. Translation: the adults are in the room — and they haven’t left the party.

For Lululemon (LULU)’s Institutional Ownership breakdown, 🔍 see here.

🩳 Trigger #3 — Shorts Are Here, But Not Running the Show

Short interest is meaningful but not screaming “panic”:

• 🧾 Short % (as of Dec-15-2025): ~7.09%

• ⏳ Days to cover: ~1.52

That reads like healthy skepticism, not “bear bonanza.” And in a turnaround, that skepticism can become fuel. 🔥

🧠 Trigger #4 — Analysts Are… Meh (Which Can Be Bullish)

Consensus is basically: Hold, with a lot of “we respect the brand, but…” energy.

Concerns typically revolve around:

• 🇺🇸 Americas softness / slowing growth

• 📉 Margin pressure (tariffs, reinvestment, costs)

• 🧑💼 Leadership uncertainty (more on that in a second)

Positives:

• 💎 Brand strength / premium positioning

• 🌍 International growth runway

• 🧪 Product innovation pipeline

In turnaround land, “meh” can be a gift. Because when expectations are low, execution doesn’t need to be perfect — it just needs to improve. ✅

💰 Trigger #5 — Valuation: Cheaper Than It’s Been in Years

Valuation gauges show a major multiple reset over the past year:

• 📉 Trailing P/E now under 15, roughly cut in half versus prior year levels

• 📊 Price/Sales (just above 2) and EV/Revenue (ditto) look much more reasonable

• 🧮 EV/EBITDA (under 9) looks decidedly cheaper than the “peak premium” era

• 🧷 Price/Book still not “cheap” (close to 5) but LULU has never been a bargain-bin stock by that metric

This matters because LULU doesn’t need to become a different company to re-rate — it just needs to stop slipping and show credible progress. 🧗

🍭 Trigger #6 — Buybacks: Management Handing Out Candy

The Board approved a $1.0B increase to the repurchase program (with ~$1.6B remaining authorized as of mid-December 2025). That’s not a guarantee of upside… but it is management saying:
“Yeah, we think the stock looks better than the headlines.” 🍬📉

📣 Trigger #7 — Earnings: Mixed U.S., Strong International

From the Q3 fiscal 2025 update (ended Nov 2, 2025):

• 🧾 Revenue up 7% to $2.6B

• 🌎 International net revenue up 33%

• 🇺🇸 Americas net revenue down 2% (comps down 5%)

• 📉 Gross margin down (pressure), operating income down (pressure)

• 🏪 Store count: 796 (after 12 net new stores)

Translation: the brand isn’t broken — it’s bifurcated. International is doing burpees. The U.S. is stretching and sighing. 😮💨

 👉 Want the full picture? Dive into Lululemon (LULU)’s financials here.

🎭 Trigger #8 — Leadership Transition: Risk… and Catalyst

CEO Calvin McDonald plans to step down effective Jan 31, 2026, with interim co-CEOs (CFO + CCO) while a search runs.

This can cut both ways:

• 😬 Uncertainty can weigh on the stock short term

• 🚀 A strong hire can spark a re-rating (especially with low expectations)

Meanwhile, the buyback gives time and cushioning. ⏳🛟

🧠 So… Is It Time to Wear the Pants?

Here’s the bull case in one breath:
Premium brand + international momentum + valuation reset + buybacks + manageable short interest + “meh” sentiment = a classic quality-turnaround setup.

And the bear case in one breath:
U.S. softness persists + margins stay pressured + tariff/cost math bites + leadership transition drags + turnaround takes longer than your patience.

If you’re the type of investor who wants certainty, LULU may frustrate you.
If you’re the type who buys quality when it’s unpopular — and waits — this is the kind of chart that may eventually stop hurting and start healing. 🩹📈

💡💡💡 Curious about another deep oil exploration play?
Check our take on UnitedHealth Group.

⚡ Quick Take / TL;DR

• 🕶️ Burry went big in portfolio % (but not gigantic in $)

• 🏦 Institutions remain a strong anchor

• 🩳 Shorts are present but not dominant

• 🧠 Analysts are neutral — expectations are low

• 💰 Valuation is far more compelling than in years

• 🍬 Buybacks add support and signal confidence

• 🌍 International is strong; U.S. needs a refresh

• 🎭 CEO transition adds uncertainty — and potential upside catalyst

❓ FAQ

Is Lululemon still a growth company?
Yes, at least to an extent — but growth is increasingly driven by international markets while the U.S. works through a slower phase.

Why does the CEO change matter?
Leadership transitions can create uncertainty… but also unlock a rally if the market likes the new hire and strategy.

Is short interest high enough for a squeeze?
Not “meme stock” levels. But in a recovery, moderate short interest can accelerate upside when sentiment flips.

What’s the biggest risk right now?
Sustained U.S. weakness and margin pressure lasting longer than the market’s patience.

Why the FUNstock Index 8.3/10?
Because it’s a high-quality brand with real catalysts and a valuation reset — but still has execution risk (hence not 10/10).

✍️ About the Author

Frédéric Marsanne is the founder of FUNanc1al — part market analyst, part storyteller, part accidental comedian. A longtime investor, entrepreneur, and venture-builder across tech, biotech, and fintech, he now blends sharp insights with a twist of humor to help readers laugh, learn, live better lives, and invest a little wiser. When not decoding insider buys or poking fun at earnings calls, he’s building Cl1Q, writing fiction, painting, or discovering new passions to FUNalize.

🧾⚠️📢 Fun(anc1al) but Serious Disclaimer: 🧾⚠️📢

This article blends research and entertainment — not prescriptions or financial advice. Investing involves risk, including loss of principal.

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Consult a qualified financial professional if you must.

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