Beneath Lululemon’s Stock Slump Lies a Broader Spending Squeeze
Lululemon shares have plunged 53% in 2026, but Michael Burry sees opportunity as weakness spreads across apparel, retail and the broader consumer sector.
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Lululemon shares have plunged 53% in 2026, but Michael Burry sees opportunity as weakness spreads across apparel, retail and the broader consumer sector.
NIKE is restructuring its marketplace strategy by refreshing 15,000 wholesale spaces and elevating 150 company-owned stores while reducing promotional intensity to support full-price sales and margin expansion. Wholesale revenues grew 4% in fiscal 2026 with double-digit North America growth, though the company is deliberately trading near-term volume for healthier inventory and stronger pricing. Competitors adidas and lululemon are pursuing similar balanced approaches to marketplace growth while maintaining premium positioning.
lululemon is restructuring its growth strategy to restore full-price sales growth by updating core product franchises, reducing SKUs, and improving inventory discipline. The company is increasing chase volume by 20% to react faster to consumer demand. While some products like Scuba and Groove Wide-Leg bottoms show promise, traditional leggings sales declined 20% as consumers shift toward looser silhouettes. The stock has underperformed significantly, down 39.9% in six months, and earnings estimates have been revised downward.
Nike and Lululemon have both collapsed to multi-year lows due to weak North American sales, slowing revenue growth, and increased competition. Nike faces challenges from its wholesale retailer exit strategy and reliance on markdowns, while Lululemon struggles with soft women's apparel sales and tariff pressures. Though both face near-term headwinds, Lululemon appears better positioned for a comeback due to its cheaper valuation (10x earnings vs. Nike's 21x), despite analyst expectations for continued declines in fiscal 2027.