Lululemon's CEO Steps Aside as Company Faces Challenges

CEO Calvin McDonald to Depart in January

Lululemon Athletica is experiencing a significant transition as CEO Calvin McDonald prepares to step down in January after nearly seven years at the helm. This leadership change comes as the company faces increasing competition in the U.S. market from newer, trendier brands.

Stock Surge Despite Market Struggles

Despite the leadership shift, Lululemon's shares rose approximately 7% in after-hours trading. This surge was driven by the company's decision to raise its profit forecast, fueled by strong international sales. Additionally, Lululemon announced a $1 billion increase to its share buyback program.

Challenges in the U.S. Market

Known for its premium leggings and athleisure wear, Lululemon has seen declining sales in the U.S. due to competition from brands like Alo Yoga and private-label copies. In September, executives expressed disappointment with the company's performance and product execution in the domestic market.

Revised Financial Outlook

Lululemon has updated its annual revenue expectations to between $10.962 billion and $11.047 billion, a slight increase from the previous forecast of $10.85 billion to $11 billion. The company also raised its profit expectations, now anticipating earnings per share between $12.92 and $13.02, up from $12.77 to $12.97.

Tariff Impact and Quarterly Performance

Despite the positive outlook, Lululemon expects a $210 million reduction in its 2025 income from operations due to tariffs. For the quarter ended November 2, the company reported net revenue of $2.57 billion, surpassing estimates of $2.48 billion.