Lululemon CEO to Step Down, Company Lifts Full Year Profit Forecast

Lululemon athletica disclosed on December 11 that Calvin McDonald will step down as chief executive and as a director effective January 31, 2026, and will remain with the company as a senior advisor through March 31, 2026. The Vancouver based release said the board is conducting a comprehensive search for a permanent CEO with the assistance of a leading executive search firm, and that Marti Morfitt, the chair, will assume an expanded role as executive chair immediately to steward strategy during the transition.

The board named Chief Financial Officer Meghan Frank and Chief Commercial Officer André Maestrini as interim co CEOs. The announcement came as Lululemon reported third quarter results that outperformed expectations and raised its full year outlook after having cut guidance in the prior two quarters. The company now expects full year sales between $10.96 billion and $11.05 billion, and earnings per share in a range of $12.92 to $13.02. LSEG compiled estimates clustered near an EPS of roughly $13, aligning with the company’s updated outlook.

Markets reacted quickly. Shares jumped roughly 9 to 10 percent in premarket and extended trading on the day of the announcement. One market snapshot reported LULU at $204.97, up $17.96 or 9.60 percent, reflecting investor relief at the combination of leadership clarity and improved guidance.

The personnel change follows more than a year of underperformance and growing shareholder pressure. Analysts and coverage framed McDonald’s departure against declining market share in a crowded athleisure sector. Matt Jacob of M Science said Lululemon “lost share in a increasingly competitive athleisure market,” and noted that restoring momentum in the company’s core women’s pants category will be a focal challenge for any incoming CEO. The company’s founder and largest shareholder, Chip Wilson, had publicly urged changes at the firm prior to the announcement, adding a layer of activist pressure to governance decisions.

The immediate implications are twofold. First, the upgraded guidance reduces near term earnings uncertainty and provides a clearer base for valuations, yet the stock move also reflects short term sentiment rather than a resolution of structural issues. Second, the appointment of an executive chair and dual interim leaders raises governance questions about decision making during a critical strategic reset. Investors will watch hiring signals, compensation structure for the new CEO, and whether the board prioritizes operational turnaround or product and marketing innovation.

Longer term, Lululemon faces secular pressures familiar across retail apparel, including intensifying competition, shifting consumer preferences, and margin sensitivity to price promotions and supply chain costs. The coming months, including the CEO search and the company’s next quarterly disclosure, will be a test of whether Lululemon can convert a beat and raised guidance into durable share gains and sustainable profitability.