Michael Burry Doubles Down on Estée Lauder Amid Contrarian Portfolio Shift
New York, May 16, 2025 – Michael Burry, the famed investor portrayed in The Big Short for predicting the 2008 housing market crash, has doubled his stake in cosmetics giant Estée Lauder Companies Inc. (NYSE:EL), according to a 13F regulatory filing with the SEC on May 15, 2025. Burry’s Scion Asset Management increased its position from 100,000 shares to 200,000 shares in Q1 2025, valued at approximately $13.2 million at the current price of $65.02 per share. This move comes despite a 13.94% year-to-date decline in EL stock, which closed at $63.67 on May 15, 2025, but rose 3.85% to $66.12 in after-hours trading.
Why Estée Lauder?
Burry’s increased bet on Estée Lauder aligns with his contrarian investment philosophy, favoring undervalued companies with strong fundamentals. Estée Lauder, a global leader in premium skincare, makeup, and fragrances, has faced challenges, including a 9% drop in organic sales and a 28% decline in travel retail sales in Asia, particularly China. However, under new CEO Stéphane de La Faverie, the company is pursuing its “Beauty Reimagined” strategy, focusing on product innovation, luxury price tiers, and cost control. The firm reported Q3 2025 earnings of $0.65 per share, surpassing expectations of $0.31, with revenues of $3.55 billion against forecasts of $3.52 billion. A 310-basis-point gross margin expansion reflects improved pricing power and restructuring progress.
Analysts, like Angeli Gianchandani from NYU, see Burry’s move as a vote of confidence in Estée Lauder’s ability to rebound in a competitive global market. The company’s brands, including La Mer, Clinique, and MAC, maintain strong equity, and its high gross margins (averaging 74% over five years) underscore its pricing resilience. Despite risks like tariff uncertainties and softening demand in North America, Burry likely views EL’s current valuation—down 83% from its 2021 peak of $355.39—as a deep-value opportunity.
Broader Portfolio Moves
Burry’s Q1 2025 portfolio adjustments reflect a cautious stance:
- Bearish Bets: Scion took a significant bearish position on NVIDIA (900,000 put options), signaling skepticism about AI-driven tech valuations.
- Exiting China: Burry liquidated all positions in Chinese tech giants Alibaba, Baidu, JD.com, and PDD Holdings, likely due to trade tensions following President Trump’s April 2025 tariff announcements, despite a 90-day tariff suspension.
- Healthcare Pullback: Scion exited stakes in HCA Healthcare, Oscar Health, and Molina Healthcare, reducing exposure to the sector.
- Concentrated Holdings: Burry slashed his portfolio to seven holdings, with Estée Lauder as a top position, reinforcing his high-conviction approach.
Market Context and Estée Lauder’s Performance
Estée Lauder’s stock has faced headwinds, trading at $65.02 on May 16, 2025, with a market cap of $22.03 billion. Key metrics include:
- 1-Day Performance: Opened at $64.77, hit a high of $68.12, and closed at $65.02, up 2.12% from the previous close of $63.67.
- 1-Month Trend: Rose from $52.21 on April 16 to $65.02, a 24.5% gain.
- 1-Year Decline: Down 47.3% from $123.36 in May 2024, reflecting macroeconomic pressures and regional sales challenges.
- Historical Context: Far below its 2021 peak of $355.39 but above its 2025 low of $48.37.
Posts on X highlight mixed sentiment. @Summitexchange_ suggests Burry sees EL as a defensive luxury play with China exposure, resilient to inflation and rate volatility. Conversely, @TheRealStockMom questions the bet, citing weak sales and profit drops, while @tomthetrader1 notes EL’s “catastrophic” 83% decline and low momentum.
Implications
Burry’s doubled stake in Estée Lauder signals belief in its long-term recovery, leveraging its brand strength and restructuring efforts. However, his broader portfolio cuts and bearish bets suggest caution about market overvaluation, particularly in tech. Investors should note EL’s challenges, including tariff risks and regional demand softness, but its recent earnings beat and strategic pivot offer upside potential. For further details, check SEC filings or follow market updates on platforms like Bloomberg or Benzinga.
