Lululemon CEO Calvin McDonald to step down in January as company lifts profit outlook

Lululemon Athletica said CEO Calvin McDonald will step down in January, prompting the company to raise its annual profit guidance and lifting its shares in extended trading. The development comes as the retailer navigates a slowdown in its key U.S. market, as per a Reuters report.

The company confirmed that McDonald will leave after nearly seven years at the helm, during which Lululemon expanded its global presence but more recently faced weakening sales in its core categories. In the absence of a permanent successor, chief financial officer Meghan Frank and chief commercial officer André Maestrini will take over as co-interim CEOs while the board begins its search for a new leader. The shift marks a decisive move for the athleisure giant at a moment when competition from brands like Alo Yoga and lower-cost private labels has intensified. Lululemon’s stock has fallen 61% over the past two years as it grapples with declining demand and internal concerns over product execution.

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The management changes also unfold amid reports of unrest involving founder Chip Wilson. According to the Wall Street Journal, Wilson has been dissatisfied with the brand’s marketing and was considering a proxy fight, though Lululemon did not respond to requests for comment on that front. Despite these issues, the board approved a $1 billion expansion of its stock buyback programme, an action analysts interpret as an effort to steady investor sentiment. While Morningstar’s David Swartz said McDonald has been an effective CEO, he noted that shareholders appear encouraged by the board’s proactive stance.

In its latest update, Lululemon said that although the holiday season began with strong Thanksgiving-week spending, demand softened afterward as consumers continued to trade down in apparel. The company expects heavier discounting as it clears older inventory and aims to keep units below sales in 2026. Interim co-CEO Frank added that Lululemon will boost marketing investment this quarter to drive store traffic and strengthen brand visibility. The retailer now forecasts full-year earnings of $12.92 to $13.02 per share, above its prior estimate, but warned of a $210 million tariff-related hit to 2025 operating income. Operating margin remains projected to decline by about 390 basis points.

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The company’s longer-term history also resurfaced, with attention once again on Wilson’s 2013 remarks suggesting that some women’s body types were not suited to Lululemon pants. Those comments followed a recall over overly sheer yoga pants and led to his resignation as chairman shortly afterward. For the quarter ended November 2, Lululemon reported revenue of $2.57 billion, ahead of LSEG estimates of $2.48 billion.

Frank and Maestrini will take over as co-interim CEOs from January as the board initiates a global search for McDonald’s replacement. Lululemon has signalled that tighter inventory planning, refreshed product strategy and a stronger marketing push will be central to its near-term recovery efforts, even as international markets continue to show relative resilience.