Lululemon CEO Calvin McDonald to Step Down in January After Year of Weak Performance

Lululemon said Thursday that Chief Executive Calvin McDonald will leave the company at the end of January, ending a six-year tenure marked by rapid early expansion and a difficult stretch of underperformance over the past year. He will remain as a senior adviser through March while the board searches for a successor.

The move comes after mounting pressure from founder and largest shareholder Chip Wilson, who has criticized the company’s strategy and warned in a newspaper ad two months ago that Lululemon was “in a nosedive.” Board chair Marti Morfitt said the retailer needs a leader capable of guiding it through its next phase of “growth and transformation.”

Chief Financial Officer Meghan Frank and Chief Commercial Officer André Maestrini will serve as interim co-CEOs while a global search firm helps select a permanent replacement.

McDonald’s exit was announced alongside fiscal third-quarter results that beat market expectations but were accompanied by soft guidance. Earnings came in at $2.59 per share on revenue of $2.57 billion, both above analyst estimates. Net income fell from a year earlier as margins tightened. Shares rose roughly 10% in extended trading.

The retailer projected fourth-quarter revenue of $3.50 billion to $3.59 billion, slightly below Wall Street forecasts, and earnings per share of $4.66 to $4.76, well short of the $5.03 analysts anticipated. Lululemon lifted its full-year outlook, with expected sales between $10.96 billion and $11.05 billion and full-year EPS of $12.92 to $13.02.

McDonald said early holiday demand was strong but noted a slowdown after Thanksgiving, which the company factored into its updated guidance. U.S. revenue trends remain soft, while international markets continue to drive growth. Sales in the Americas fell 2% in the quarter, with comparable sales down 5%. International revenue jumped 33%.

Lululemon is also facing higher costs after the end of the U.S. de minimis exemption for low-value imports, which has hit its margins more than those of peers. The company now expects tariffs to reduce full-year profit by about $210 million after negotiating lower vendor costs.

Lululemon continues to expand into new categories, including footwear, outerwear and casual apparel, to counter rising competition from brands such as Vuori and Alo Yoga and a shift in shopper preferences away from athleisure staples.