Munger Mode rating: 3 out of 5 — Hold. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent a lifetime avoiding apparel. Textiles nearly killed Berkshire, and fashion has a way of turning a great brand into a discount-rack brand faster than any spreadsheet can capture. So when we picked up lululemon's newest 10-Q, filed for the quarter ended August 2, 2026, we did so with our usual suspicion. What we found is a company whose numbers over the last decade look like a wonderful business and whose numbers over the last six months look like an ordinary one. The market, by cutting the stock roughly in half over twelve months and by 17 percent in a single session yesterday, has decided the second story is the true one. Our job is to decide whether the market is right, and if so, whether it has overshot. Our short answer: the moat is narrower than we once believed, the management question is entirely open, and the price now embeds a lot of pessimism.
Recent filings analysed: 8-K (2026-09-14), 10-Q (2026-09-03), 8-K (2026-09-03), 8-K (2026-08-13).
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