LULU Is A 'Patience Trade,' Says Michael Burry As Stock Dips Overnight On New CEO Skepticism

• O’Neill is expected to officially take over and join the board on September 8.
• Burry said he is keeping his current position in Lululemon and may add to it.
• Investors are concerned that the delayed CEO transition could keep near-term performance subdued.

Lululemon Athletica Inc.’s (LULU) stock slid over 4% in Wednesday’s overnight trading, underscoring investor skepticism after the athleisure maker named longtime Nike executive Heidi O’Neill as its next CEO. However, “The Big Short” investor Michael Burry, known for predicting the 2008 financial crisis, said he continues to maintain his position, framing the stock as a long-term “patience trade.” 

Michael Burry Holds Firm On LULU 

In his Substack post, Burry indicated he is maintaining his position and may increase exposure. “I continue to hold, and may add tomorrow. LULU is currently a 3.7% position,” he wrote.

“LULU reported and is down 5% after-hours on a new CEO hire from Nike that shows little impact from the founder Chip Wilson’s activism, and neither Elliot Management’s efforts,” Burry added. 

Lululemon’s leadership shuffle highlights a broader struggle among stakeholders. While founder Chip Wilson advocated for board changes, Elliott Management pushed for a candidate with a sharper focus on cost controls. Instead, the board opted for a leader known for scaling Nike’s direct-to-consumer business. Lululemon Athletica stock traded more than 4% lower overnight heading into Thursday. 

The company on Wednesday confirmed that its Board of Directors unanimously selected O’Neill, who will formally assume the CEO role and join the board on September 8. She brings more than 30 years of experience across sportswear, footwear, and performance apparel. 

During her time at Nike, O’Neill oversaw key areas including product development, brand strategy, and global operations, while strengthening consumer engagement across international markets.

Leadership Transition Pressures LULU Shares

The delayed transition has raised concerns among investors that near-term performance may remain muted before any strategic reset begins. They expect the months leading up to O’Neill’s arrival to be relatively quiet, with limited strategic changes from interim co-CEOs Meghan Frank and André Maestrini.

Responding to LULU’s performance so far in his Substack chatroom, Burry noted that the company has previously endured periods of operational and reputational stress, only to recover and expand its premium positioning over time.

The company is currently navigating softer U.S. demand, increased tariff pressures, and ongoing concerns around product execution.

According to a MarketWatch report, Raymond James analyst Rick Patel said scrutiny around O'Neill's appointment will linger, as Nike — her former employer — itself has been in turnaround mode "following execution missteps over the past few years." The analyst added that Lululemon would not execute major strategic changes until next year. A Jefferies analyst, meanwhile, reportedly considers it too soon to pass judgment on O'Neill but expects fundamentals to worsen without a "reset around the core product, tighter inventory discipline, and a credible plan to stabilize the Americas."

What Are LULU Retail Traders Saying? 

On Stocktwits, retail sentiment around the stock jumped to ‘extremely bullish’ from ‘bearish’ territory the previous day, with message volume surge 1,410% in 24 hours.

A bullish user said, “Chip [Wilson] needs to ruffle some feathers here.” 

Another user remarked, “Getting a new CEO is not going to solve the heart of the problem.”

LULU stock has declined by over 21% year-to-date. 

Also See: POET, NVTS, SNDK Stocks Hit 52-Week Highs Today: What’s Driving The Rally?

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