Lululemon Athletica Inc said on Thursday that chief executive Calvin McDonald will step down at the end of January, marking a leadership transition after a year marked by weak sales in its core US market.
The Vancouver-based athletic wear maker said McDonald will leave his role effective January 31 and remain with the company as a senior adviser until March 31, 2026, to support a smooth handover. Reuters reported that the board has begun a comprehensive search, with the help of an external executive search firm, to appoint his successor. McDonald has led the company since 2018.
As part of the interim arrangements, board chair Marti Morfitt will assume an expanded role as executive chair with immediate effect. The company said the move is intended to maintain strategic continuity during the transition. Chief financial officer Meghan Frank and chief commercial officer André Maestrini will serve as interim co-CEOs following McDonald’s departure.
The announcement accompanied Lululemon’s third-quarter results, which underscored the challenges facing the brand in the US. Net revenue in the Americas fell 2 per cent during the quarter, while international revenue rose 33 per cent, highlighting a widening performance gap between domestic and overseas markets. Quarterly profit declined 13 per cent, according to the company’s earnings statement.
Lululemon has struggled with slowing demand for athleisure in the US, rising input costs linked to tariffs imposed under President Donald Trump, and intensifying competition from rivals such as Alo Yoga. The Wall Street Journal reported that the brand’s recent performance has also drawn criticism from founder Chip Wilson, who has publicly questioned the company’s strategic direction.
Neil Saunders, managing director at GlobalData Retail, said in a note cited by Reuters that Lululemon’s market environment has become tougher as consumer demand has softened and competition has sharpened. He added that the company’s execution has weakened against this backdrop, making the leadership change unsurprising.
Despite the near-term headwinds, investors welcomed the clarity on succession. Shares in Lululemon rose more than 10 per cent in after-hours trading following the announcement.
The company said the incoming leadership team will focus on stabilising the North American business while continuing to push international expansion, which has emerged as a key growth engine. How quickly Lululemon can regain momentum in its largest market is likely to shape investor confidence in the next phase of its leadership.