Lululemon Slides to 199th in Trading Volume as Burry’s 2.1 Portfolio Bet Backs Struggling Athleisure Brand Amid Earnings Woes

On August 21, 2025, Lululemon (LULU) traded with a volume of $0.42 billion, a 25.86% decline from the previous day, ranking 199th in market activity. The stock closed 0.03% higher, reflecting limited short-term momentum amid broader market uncertainty.

Michael Burry’s Scion Asset Management has positioned Lululemon as a key holding in its second-quarter 2025 portfolio, acquiring 50,000 shares valued at $11.9 million. The move, a 2.1% weighting in Burry’s strategy, signals confidence in the athleisure brand despite its recent struggles. This follows Lululemon’s Q1 earnings report, which revealed a 2% decline in Americas comparable sales and a 23% year-over-year inventory increase to $1.7 billion, raising concerns about markdown risks. The company also cut its full-year EPS guidance to $14.58–$14.78 from $14.95–$15.15, citing macroeconomic pressures and tariff impacts.

Analysts remain divided, with a “Moderate Buy” consensus rating. Of 31 analysts, 13 advocate “Strong Buy,” while 13 recommend “Hold.” The average price target of $289.72 implies a 47% upside from current levels. Lululemon’s valuation has contracted to 14 times forward earnings, well below the sector median and its five-year average, potentially attracting value-focused investors. However, challenges persist: gross margins have narrowed to 58.3%, operating margins fell to 18.5%, and U.S. discretionary spending remains subdued.

A backtest of a strategy buying the top 500 stocks by daily trading volume and holding for one day from 2022 to 2025 yielded a 6.98% annualized return, with a maximum drawdown of 15.59%. The approach showed steady growth but highlighted risks during mid-2023’s sharp decline, underscoring the need for risk mitigation in high-volume trading strategies.