lululemon athletica heads into the final stretch before its September 3 earnings with a notable split: short sellers have been quietly adding positions for weeks, while the stock itself trades near a precarious floor well below where most analysts thought it would be by now.
The short positioning story is the most compelling angle this week. Short interest has climbed roughly 40% over the past month, reaching 9.0% of the free float — around 10.2 million shares — as of July 23. That monthly build is sustained and deliberate, not a spike. The week-on-week pace has held: shares short rose another 2.2% in the latest reading, continuing a trend that began in earnest around July 9 when the short count jumped by more than 1.3 million shares in a single session. The ORTEX short score has edged above 51, its highest recent reading, though still in a range that suggests measured rather than extreme conviction. Borrow conditions remain loose: availability runs at roughly 559% of short interest — well within the "plenty of supply" range — and the cost to borrow is only 0.43%, despite rising 30% over the past week. Bears are adding, but they are not being squeezed, and new short positions remain cheap to initiate.
Options positioning adds a secondary layer of caution. The put/call ratio has drifted up to 0.73, running above its 20-day average of 0.69 by roughly 1.5 standard deviations — not an alarm signal, but a clear shift from the call-heavy skew that prevailed through much of June. The ratio is still well below its 52-week high of 0.97, so the hedging is measured rather than panicked.
The Street's direction is unambiguously downward, and the most recent moves are pointed. Morgan Stanley reinstated coverage on July 6 with an Underweight at $93. Truist downgraded to Sell on July 16, cutting its target from $115 to $94. Wells Fargo trimmed its target further this week to $105, keeping an Equal-Weight. The cluster of post-earnings cuts from early June — when Citi, UBS, Telsey, Jefferies, and Piper Sandler all lowered targets by between $15 and $55 — makes the consensus price target of $128 look stale relative to where the active debate is happening: the bear case is centred around $93–$105. Valuation multiples have compressed accordingly. The trailing P/E has retreated to roughly 9.9x, down over half a point in the past week. EV/EBITDA is at 5.4x, also falling. The EPS momentum factor ranks in the 12th percentile on a 90-day basis — the company has been missing or guiding lower, not beating. Against that, the EV/EBIT factor scores in the 90th percentile of the universe, meaning the market is already pricing in significant pressure. The bear thesis, as articulated by recent analyst moves, points to brand erosion — weakening Truist card data, fading social-media presence, a leadership transition mid-stream, and China growth concerns — as drivers of further multiple compression toward the $70–$80 range.
One insider data point is worth noting without overstating. Director Chip Bergh bought 4,275 shares at roughly $117 on June 15, a purchase of around $500,000. The President, Andre Maestrini, made a similar-sized buy in April at $151. Net insider activity over the past 90 days is positive at roughly $3.4 million. These are meaningful purchases, not token ones. But they were made at prices well above today's $114.28 close — both buyers are underwater — and they sit alongside routine sales from the CFO and Chief Operating Officer.
The last earnings print, on June 4, produced a 9.4% single-day drop and left the stock 3.3% lower five days out. The most recent update from June 25 recovered roughly 4% in a day and held that gain through the week. Two data points don't form a reliable pattern, but they confirm the stock is capable of violent moves in both directions around results. With short interest now at 9% of float and still building, the setup into September 3 is whether the short rebuild reflects fundamental conviction or creates a coiled spring if the company can stabilise its North American trend.
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