저자: AdamFeather · 외국인
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마이클 버리가 80% 하락한 룰루레몬을 계속 매수하는 근거를 4가지 테스트(주주명부 회전율, 유형자산가치 대비 주가, 과거 Ross Stores 비교, 나쁜 경영의 역설)로 설명. 최근 분기 실적은 북미 동일매장매출 -12%, 중국 불변환율 -2%, 가이던스 하향으로 3개 논거는 유지되나 중국 논거는 훼손. 버리의 회복 지표는 미국 불변환율 동일매장매출이며 현재 -12%라 아직 회복 신호 없음. 투자 조언 아님을 명시.
다듬은 글
down 80% and he keeps on adding. Michael Bur has been buying Lululemon all the way down and he's published the reasoning, which is the unusual part. So, this isn't a video about whether the stock goes up. It's about the method underneath that decision, which works on any company that you ever look at.
Before anything else, this isn't financial advice, and nothing here recommends that you buy or sell any share in anything. I'm not a financial adviser. Everything here comes from published results, published notes, and public filings. Famous investors are wrong in public regularly, including this one.
That possibility is in here rather than left out of it. So today, four tests Bur applies in the order he applies them. Then the quarter that landed 4 days ago and what it did to each test. And the answer is not tidy. Three of the tests survived it. One is delayed and one broke. So, let's start today with the fall in the share price of Lululemon because its size is the reason that anybody is looking at this stock at all.
$516 was the share price at the end of December 2023. $423 was the price in January 2025. Around $105 is the price as of right now. So, roughly 80% of that value has gone. And about $50 billion of market cap has been wiped out alongside of it. That's not a wobble. That's a market deciding that Lululemon is a different kind of company than it used to think that it was.
But here is where things get interesting because the first thing Bur looks at has got nothing whatsoever to do with leggings. He counts how many shares have changed hands since the peak as a proportion of the shares that exist. The list of who owns a company is called the share register and it changes every time somebody sells to somebody else.
The company itself is unaffected. only the names move. His rough rule is that three to five times the company's shares need to trade before the shareholder base has genuinely turned over. Newer companies can need 10. Lululemon has traded more than 15 times its entire share count since December 2023.
The argument Bur uses here is straightforward. Everybody who bought at $400 and wanted out has had 2 1/2 years to leave. So, the people holding Lululemon right now bought it cheap, know that it's unpopular, and are less likely to panic. And if it rallies, nobody above them is waiting to sell into that gap.
Now, you can disagree with that, and plenty of people do, but notice what this is. A fact about the share register rather than an opinion about the clothes that Lululemon sells. The second point is the number Bur keeps on returning to, and almost nobody in retail commentary ever uses it. Tangible book value per share.
what the company owns minus what it owes minus anything you can't touch divided by the shares. That's the tangible book value per share. Over about three years, that number roughly doubled from $20 a share to over 40. So, the business kept building real value throughout while the share price fell 80%.
So, the stock now trades at about 2 1/2 times that figure. The last time it was that low was March 2009, which is a date that means something to anybody who was investing in Lululemon back then. But here is the honest problem with this, which Bur raises himself. Tangible book value deliberately ignores the brand.
For a company whose entire value is a brand, measuring it while ignoring the brand tells you what the floor is, not what the thing is actually worth. The third point is a comparison. And comparisons are where the analysis usually goes wrong. In October 2000, he bought Ross Stores at about seven times earnings.
Off-pric retail back then was the least fashionable thing on the market, and everybody wanted Internet shares. Over the 25 years since, that produced about 20.8% a year. Microsoft over the identical time period produced about 12. It's a genuinely remarkable trade, but it's also the single most flattering comparison available to Bur because nobody publishes the analogies that didn't work.
For every Ross stores, there's a Liz Clayborn or another brand that was also cheap but never came back. To Bur's credit though, he names that risk himself and he names the question underneath it. Will this still be a brand that people want in 15 years time? The answer really is that nobody knows. It's not a criticism of Bur.
It's the actual question and there's no obvious data in it. The fourth is a line of his that sounds like a joke but isn't. Bad management, Bur argues, is a value investor's best friend because bad management is what makes a good business cheap, and management can be replaced. And Lululemon has an unusual amount of it on the record.
the Iron Rand shopping bags back in 2011, the see-through leggings in 2013, a founder who blamed the customers bodies for the product failing on live television, and more recently, leggings pulled from sale in 2024 at a yoga event on the Great Wall of China that used a Japanese wardrobe. The argument here is that a business surviving all of that has got something durable in it, and that the errors are the reason that you can buy it at this price at all.
The counterargument of course is equally simple. A company that keeps on doing this may simply be a company that keeps on doing this. There are two more things though in the arithmetic that are worth your attention and Bur treats both as supportive rather than central. The first is the buyback which is the company using its own cash to purchase its own shares and then cancel them.
Fewer shares means every remaining share owns a larger slice of the same business. There are about $ 108 million left, down from 145 million a decade ago and roughly a billion dollars of buyback authority is left. At a 12 billion company, that's a meaningful proportion of the shares being retired at a very low price, which is the quiet argument for a falling share price if you are staying.
The company buys back more of itself with the same money. [snorts] The second is the consensus of the analysts covering it. Only a handful rated Lululemon a buy before this quarter and several cut their targets after it. That's either the market being sensible or the market being late and there's no way to know which until afterward.
There there is also a governance situation running underneath all of this. And two pieces of jargon are worth unpacking or translating. First, an activist fund is an investor that buys a stake specifically in order to force change. A proxy fight is what happens when they try to put their own people on the board and the board resists.
One holds around 5% here. The founder holds about eight and they settled that fight back in May. Neither of them wanted the chief executive the board eventually, which is worth knowing before anybody describes this as a clean turnaround setup. And then there is the strangest part of his Lululemon argument and the part that tells you most about how Michael Bur actually thinks.
He argues that some of Lululemon's sales weakness isn't about Lululemon at all. It's about how its customers are feeling. The chain has four links, and it's worth following each one because the shape of it is the actual lesson here. First, the American customer is unusually uniform for Lululemon. Broadly, women between 25 and 45, urban and suburban, degree educated, on household incomes above $100,000.
Second, consumer confidence in America has split along political lines since 2016. He cites the Federal Reserve for the claim that the gap now exceeds income, age, and education combined. Third, the two halves of the country are now miles apart on the standard confidence index, and Lululemon's customer sits almost entirely inside the glooier half of it.
And therefore, some of the weakness is a customer who feels poor rather than a brand that has stopped mattering. He puts it at perhaps 2% of comparable sales. Now, that's a clever piece of thinking because it separates two things that actually look identical in the accounts but are completely different in terms of what they mean.
A brand in structural decline is permanent. A customer having a miserable year is not, or you would hope it's not, and the market is currently pricing the first one. That distinction is worth billions of dollars to Lululemon shareholders if Bur is right. It's also what makes somebody a contrarian investor rather than a commentator.
But look at what he's done there because there are three problems with that analysis and they're worth as much as the argument itself. The first is that sentiment is a famously poor predictor of spending. People tell surveys that they're miserable and then they go and buy the leggings anyway. The gap between what people say about confidence and what they actually spend is one of the more reliable disappointments in economics.
The second is that it's a convenient argument. It explains away the bare case without requiring the company to have done anything better. Arguments shake like that deserve extra suspicion, including when you happen to agree with them and especially when you already own the shares. And the third objection is only 4 days old.
China has no American political cycle at all. And China went negative in constant currency last quarter. North America down 12 is one thing. If the customer in Shanghai is also walking past the stores, a theory about American confidence cannot be carrying much of the weight. None of this means Bur is wrong.
It just means that the argument was stronger in June than it is today. And he wrote it [clears throat] in June. What it shows you is the method. He reaches for an explanation that nobody else in the market is considering at that moment. And he's willing to look eccentric while he does it. That's the same instinct that made him famous back in 2007.
It's also the same instinct that makes somebody wrong in an unusual and expensive direction. You don't get one without the other. That's the actual lesson here. And it's worth more than the stock. And then on the 3rd of September, just four or 5 days ago, the second quarter results finally arrived. What happened?
Well, the stock tanked. And we can see that in this diagram. Comparable sales is the number that matters here, and it's worth knowing what it measures. It compares stores that were open in both periods. So, opening 40 new shops can't flatter the result. It measures whether the shops you already had are selling more or less than they did.
Group comparable sales came in down 9% with North America down 12, which is the worst reading that business has produced in an entire decade. And China, which is the entire growth engine of the Bur thesis, came in up 4% as reported and down two in constant currency. Now, what on earth does that mean?
Well, those two words matter a lot more than anything else in the quarter. So, here is what they actually mean. Lululemon sells in yuan and reports in dollars. If the dollar weakens, the same yan of sales turns into more dollars and the growth rate goes up without anybody selling a single extra piece of clothing.
Constant currency strips that out. It asks what happened to sales if you hold the exchange rate constant, which is the only version that tells you whether the shops are busier. reported. China grew, but in constant currency, it shrank. And it's the constant currency number that tells you about the customer.
Fullear revenue guidance cut by around $650 million. Third quarter earnings guidance about 60% below what analysts expected. The headline earnings number did indeed look like a large beat, a large success, but if you strip out a one-off tariff refund, it isn't one. and management attributed part of the weakness to negative commentary on social media, which is either true or the single least reassuring explanation available.
The shares hit an 8-year low. One broker cut its target to $82 with a sell rating. So, what does this mean for Bur's thesis? Well, the turnover argument is untouched. Volume is a fact about the past and no quarters results changes that. The tangible book argument is largely untouched and arguably stronger because the price fell further while the balance sheet did not.
The margin recovery is delayed rather than dead. Markdowns were supposed to peak but are still rising. The new chief executive is unchanged and she starts tomorrow or maybe a few weeks ago by the time you're watching this, which is the 8th of September. And China broke, not the whole business, the specific pillar that was carrying the growth half of the argument.
3 days after that quarter, Bur posted publicly that nothing in it changes his conclusion, which is either conviction or stubbornness. And the honest position is that those two things look identical from the outside and are only told apart afterwards. Which raises the question you actually want answered.
If he's right, what does the turn look like and when? And unusually, he has answered that because this company has been through all of this before. Back in 2013, there were sheer leggings and a founder blaming women's bodies on television live. Gross margins fell from about 56% to 48. And then with Lululemon, 5 years of nothing.
The shares went sideways and down while everybody explained why the brand was finished. In 2018, a new chief executive arrived. Within a year, gross margins were back above 58%, higher than they'd ever been. The shares broke through the old high that March and by September they'd reached $160, roughly four times the low.
So Bow's model of a recovery isn't complicated. Bad management makes a good business cheap. The departure of bad management is the event. Margins recover first and the multiple follows. Though I should be straight about one thing. His filings show him buying this company in 2025 and nothing before that.
The pattern here is Lululemons, not his. So, I can't tell you whether he traded the last one and made all that money back in 2013 from Lululemon. Maybe he did, maybe he didn't, but it's why the 8th of September 2026 matters to him more than any quarter. And here's the sharpest part of his method. He named in advance the single number that would tell him that the recovery was actually working.
Not revenue, not margin, and not the share price, but America's comparable sales measured in constant currency. That's the first place a genuine product recovery shows up because it strips out new stores, exchange rates, and everything else that can flatter a headline. And the latest reading on that number published 4 days ago is down 12%.
So on his own chosen indicator using his own definition, the turn has not started yet. That's not my assessment. It's his test applied to his company with the current answer. So on timing, he said he can wait a year and that the analysts predicting another year of margin pressure are describing something only new management can change.
Which means the honest version of his position is this. Nothing in the next 2 or 3 quarters will settle it. And he structured the whole thesis so that it doesn't need to. He values the company against a 15-year time horizon. On that time scale, everything here is a rounding error, including the quarter that just tanked the shares.
And there's a version where he's right about the business and the brand. and it takes so long that being right stops feeling like it. What's worth taking is the shape of Bur's method and it applies to anything that you ever consider putting money into. So, let me put the whole thing in one place because four tests and a broken quarter is a lot to hold on to at once.
He's not buying leggings. He's buying four things at the same time and not one of them is an opinion about athleisure. He's buying a shareholder register that has already emptied out 15 times the entire share count has changed hands since the peak. So, the people who paid $400 are gone, and there's nobody sitting above him waiting to sell into a recovery.
Second, he's buying a balance sheet that got bigger while the price got smaller. Tangible book roughly doubled to over $40 a share across the same 3 years the shares fell 80%. Third, he's buying a company that is quietly shrinking itself. About 115 million shares left and $730 million of buyback authority still to spend at a 12 billion valuation.
every share they retire at this price makes the ones that he holds worth more. And he's buying replaceable management. Number four, that's the one that sounds like a joke but actually isn't. Bad management is what makes a good business cheap. And unlike a dead brand or a broken product, management can be changed in an afternoon which happens tomorrow.
So underneath all four is one claim and the whole thesis rests upon it that this is a brand having a bad few years priced by the market as a business in permanent decline. And to be fair to the other side of this he isn't alone in the arithmetic. The people arguing the bull case point at the same balance sheet that Bur does.
The shares trade at roughly 11 times next year's expected earnings against a sector that trades near 19. Strip out the cash and it's cheaper still. free cash flow yield near 9% gross margin still 55.7% which is a premium margin on a discount multiple 1.5 billion of cash and no debt whatsoever and the honest problem with that case is that it's the same one that broke his the international business was supposed to be the answer to America but last quarter international comparable sales went negative too which is why 29 of the 34 analysts that I could find covering it currently sit on hold not sell hold the market's position is not that it's finished, it's that nobody wants to be early.
So, two questions you actually want answered. How much does he own and how long does he hold things for? Well, the last time he had to tell anybody, he held 100,000 shares, worth about $17.8 million, roughly a quarter of his disclosed equity book back then, and doubled from 50,000 the quarter before.
That's the last number anybody can point at, and it's nearly a year old. Sion wound down after that filing, returned the capital and dregistered in November. Although he did say that he then went on to open shares in all of the same positions with his own capital, but there's no filing obligation now for him.
Everything since is what he's written, not what he's filed. And that distinction is important because we're never going to know the exact number. But the second point, and this is the part that changes how you read everything we've talked about, his average holding period at Scion was about one quarter.
In his final quarter, portfolio turnover ran at 250%. He's not a buy and hold investor and never has been. He builds a position and exits it inside a quarter or two, which is why copying his filings has ruined so many people who tried. And Lululemon was the only position that he carried from one quarter into the next.
So, the honest answer to why he's buying is partly that this one is the exception. A man who trades in quarters has called this a multi-year hold at minimum and values it against a 15-year time horizon. So, you can read that two ways. Both are available on the same evidence. Either he's found something he genuinely thinks is worth waiting 15 years for, or a 15-year horizon is the thing you reach for when the 12-month one has stopped going your way.
I can't tell you which, and neither can anybody else until the matter actually resolves, either in Bur's favor or not. But that's the actual question in this stock. And it's far more interesting than whether or not leggings are still fashionable. Let's look at how Bur analyzes this. He starts with a fact about the share register before he has an opinion about the product.
Most people do that in the opposite order. He uses a measure that ignores the story precisely because he knows that the story is what he's most likely to be wrong about. He states the thing that would prove him wrong out loud in the same document as the argument itself. and he assumes that the time scale is 15 years which almost nobody does and which changes what counts as evidence.
So you can apply all four of those to any company to a business that you own or to a decision that has got nothing to do with shares at all. Take the third one and use it on yourself this week. Write down the thing that would prove your current plan wrong while it's still cheap to know that information.
Almost nobody does that because writing it down turns a vague worry into something that you have to look at. and take the fourth one seriously as well because the time scale is doing a lot of work in his argument, far more than the numbers are. Over a 15-year view, a bad quarter is noise. On a 12-month view, the same quarter is the whole entire story.
Neither view is wrong. They just are different questions, and most arguments about investing are two people answering different questions at each other. So, there are a few limits. The first one's the biggest one. Nothing here is a view on whether the share price goes up or not. It genuinely might not.
And the people cutting their targets this week weak are not fools. Second, everything attributed to Bur here comes from what he's published. What he actually holds and what he doesn't isn't visible to me or to you. And third, the survivorship point cuts both ways. He's famous because of a small number of spectacular calls and famous investors are not right at a higher rate than anybody else.
Follow anybody into a position because of who they are rather than because you understood the reasoning and you've taken the risk without the analysis. Whether China returns to growth in constant currency, which is the pillar that broke and the one that the thesis needs back. Whether markdowns peak.
They were supposed to peak last quarter, but they didn't. And markdowns are where a brand quietly stops being a brand because they're just giving all of their products away at discounted prices. And what the new chief executive changes first because the first move a new leader makes tells you what they think that the problem is with the company.
So those questions are going to be dated and real answers will be coming in the future which still beats an opinion about what will happen including Bur's and including mine. A famous investor publishes his reasoning. The next quarter tested it and one of the four pillars gave way. Bur hasn't moved though.
That's the entire story and the ending isn't really written for another decade or certainly for a couple of more years. The results, the guidance and the notes are all public and you can form your own view today without paying anybody for it. Thank you for watching this video. Feel free to click the link below to access Cassandra's blueprint, which is my study of Michael Bry's analysis.
Hopefully, it will be useful for you to help you understand companies in a bit more detail. There's also the free quiz at stacksvereignty.com/quiz, which gives you a personalized view of your own position across several domains. Hopefully, that's useful to you as well. Thank you very much for watching this video and I look forward to seeing you in the next
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