Lululemon Below $100: A Buying Opportunity According to Sven Carlin?

Sven Carlin opens the video after a sleepless night, joking that he woke up at half past two sensing tension in the markets. In focus is an email from Michael Burry, which Carlin links to the buzz around Lululemon. The shares had just slipped under the 100-dollar mark after a heavy selloff, and the video was recorded right at that level.

The official figures came out on September 3: fiscal 2026 second-quarter revenue fell to 2.4 billion dollars, down 4 percent, or 5 percent in constant currency. Comparable sales dropped 9 percent, reaching 10 percent on a constant-currency basis. The previous quarter had looked softer rather than broken, with the business still expanding; against the strong and profitable picture of 2024, the deterioration stands out.

Regionally, the Americas posted a double-digit decline and international sales weakened as well. Growth in China landed at only 4 percent, below expectations. Because the quarter closed at the end of July, part of the fallout from the June episode may spill into the current period.

In June, the brand's flagship China event of the year featured a Japanese taiko drum on stage, a choice that triggered backlash in the country. The company later apologized, and the story was widely covered by Chinese and international outlets. In Carlin's view, part of the Chinese slowdown connects to this communication misstep.

Profitability, though, holds up: the company is not loss-making, and guidance of around 9 dollars in per-share earnings for the year remains in place. Even in a worse scenario, earnings of five to six dollars next year look plausible. Annual free cash flow runs above one billion dollars, cash on hand sits near 1.5 billion, inventories look contained, and buybacks plus tax refunds support the picture.

On valuation, the market capitalization dropped to roughly 11 billion dollars after the slide. The price-earnings multiple sits between the high single digits and 10 on current expectations. Carlin's rough math: seven dollars of earnings times a 15 multiple gets close to today's price. With brand strength and profits intact, that multiple looks cheap to him.

The product agenda on the earnings call was colorful: the Scuba line, Metal Vent Tech tees, golf apparel, Dance Studio pants, and a Lewis Hamilton collaboration took center stage. While sales fell about 10 percent, management language pointed to a slow start rather than a collapse. Carlin reads this product parade as both innovation effort and a sign of a management team searching for focus.

A major change sits at the top: former Nike executive Heidi O'Neill took over early in September with a mandate to revive the brand. Behind the scenes, an ongoing proxy fight with founder Chip Wilson demands attention. Investors should price in the chance that new leadership clears the decks aggressively in its first quarter.

The boldest part of the video is the buyout math: with an institutionally held register, a private equity bid looks conceivable. Carlin calculates that 13 to 15 billion dollars maps to roughly 120 to 130 dollars a share, while 20 billion would mean about 200. Against the cash flow, such prices could attract a buyer and imply more than 50 percent upside; for holders who bought at 500, 400, or 300, those levels would still hurt.

Carlin's personal verdict is clear: he is not buying because he wants no such tension in his life, yet he finds the setup plainly cheap and expects something to happen. Referencing his Nike review, he recalls the cyclicality of fashion names, with examples down 75 to 80 percent from peaks. If trends keep blowing the other way, the price can fall further, so this is a game of odds, not a promise.

Steel-manning the bear case: the fight for the athleisure crown has intensified, with rivals such as Alo and Vuori pulling younger shoppers, while discount pressure and lost trust in China could stretch the revenue decline beyond a single quarter. Through this lens, a multiple of 8 to 10 is not cheapness but a fair price for lasting deceleration.

What the video leaves untested matters too: the full sales impact of the drum episode is unmeasured, the product story rests on a single call, and the buyout scenario cites no confirmed bid. The new CEO's plan is still undisclosed, and a first-quarter clear-the-decks move could punish early buyers.

On interests and verification I stay cautious: Burry's stake traces to a real fund filing, but the email content is not independently verified; the 9-dollar earnings guide is open to analyst cuts, and the founder-versus-board fight could poison the news flow. Before acting on these figures, current consensus estimates and official fund disclosures deserve a check.

My practical take: it belongs on the watchlist of a patient value seeker who can stomach fashion swings, not of a short-term trader or anyone avoiding China risk. Like Carlin, I prefer waiting on the sidelines for the CEO's plan and the next quarter.

lululemon · lulu stock · stock market · michael burry · athleisure · us stocks · nodesdaily