Key Points:
- CEO Calvin McDonald to step down Jan 31, 2026
- Earnings beat with $2.6B revenue, U.S. decline offset by 30% international growth
- Interim co-CEOs appointed as board begins search for successor
Lululemon Athletica announced a significant leadership shift, as CEO Calvin McDonald confirmed that he will step down from his role on January 31, 2026, marking the end of an influential tenure that began in 2018. The company stated that McDonald will continue serving as a senior adviser through March to support operational continuity while the board assesses potential successors. He will also resign from his seat on the board.
During Calvin McDonald’s leadership, Lululemon experienced significant global expansion, the introduction of new product lines, and the establishment of a robust international presence. However, in recent quarters, the brand has struggled with waning demand in its largest market, the United States, making this transition one of the most consequential in the company’s recent history. The board has initiated a comprehensive search for the next CEO, with expectations that the new leader will bring renewed strategic energy to the brand.
Earnings Beat Highlights Mixed Market Performance
The announcement coincided with Lululemon’s latest quarterly earnings report, which exceeded market expectations. The company posted revenue of roughly $2.6 billion, surpassing analyst forecasts and boosting investor confidence. Despite the topline beat, the underlying performance revealed contrasting trends across regions.
The Americas, which include the U.S., Lululemon’s most crucial market, reported a 2% decline in revenue, reflecting slower consumer demand and heightened competition in the athleisure segment. In contrast, international growth remained a bright spot, with revenue rising more than 30%, signaling strong traction in markets such as China and parts of Europe.
Profitability, however, lagged as net income fell year-over-year. Analysts point to rising costs, global tariff pressures, and aggressive competition from emerging premium activewear labels. These factors have introduced new hurdles for Lululemon, a brand long considered a category leader. Following the earnings release and leadership news, the company’s stock surged more than 10% in after-hours trading, reflecting investor optimism around both the quarter’s resilience and the potential of a new executive direction.
Interim Leadership and Future Growth Strategy
To ensure stability during the transition, Chief Financial Officer Meghan Frank and Chief Commercial Officer André Maestrini have been appointed co-CEOs on an interim basis. Their shared leadership aims to maintain organisational consistency while guiding the company through the next phase of its strategy. The board chair, Marti Morfitt, will take on an expanded role as executive chair, providing additional oversight and supporting the incoming leadership team.
As Lululemon CEO Calvin McDonald navigates this transition, the company reiterated its commitment to its long-term growth strategy, which includes accelerating product innovation, investing in marketing, and deepening international presence. Expanded stock repurchase initiatives and renewed focus on its core product categories are expected to bolster financial health over the coming quarters.
Despite near-term challenges in its home market, Lululemon remains optimistic about its global opportunity. McDonald’s departure marks the end of a transformative era, but the company views the leadership transition as a chance to refresh its strategic vision and strengthen its competitive position in the rapidly evolving athletic apparel industry.
