Lululemon CEO Calvin McDonald will depart the company in 2026. Photo by Max Cisotti/Dave Benett/Getty Images for lululemon
Lululemon is searching for a new leader as it navigates an increasingly crowded athleisure market, tariffs and renewed criticisms from its founder. Calvin McDonald, the company’s longtime CEO, will step down next year, the company announced yesterday (Dec. 11) along with its latest quarterly earnings release.
Shares of the Canadian retailer, down 44 percent this year, jumped by more than 10 percent today following the news and a stronger-than-expected earnings report for the August-October period. Lululemon beat analyst estimates on both revenue and profit, with sales rising 7 percent year-over-year to $2.6 billion, while net income fell 13 percent to $307 million.
“The timing is right for a change,” McDonald said during Lululemon’s earnings call. He will exit at the end of January and stay on as an advisor through March as the board begins its search for his successor.
In the interim, CFO Meghan Frank and Chief Commercial Officer André Maestrini will serve as co-CEOs, while chairwoman Marti Morfitt will assume an expanded role as executive chair.
McDonald took the helm at Lululemon in 2018 after leading Sephora’s Americas division. Under his leadership, Lululemon more than tripled its annual revenue, but in recent months, growth has slowed amid intensifying competition from activewear brands like Alo Yoga and Vuori.
The company expects sluggish sales to continue into the holiday season. It forecast net revenue of $3.5 billion to $3.58 billion for the final three months of 2025, below Wall Street expectations.
Tariffs cost Lulumen $210 million in 2025
Lululemon is also grappling with the effects of President Donald Trump’s aggressive tariff policy and the termination of the ‘de minimis’ exemption, which previously allowed for goods valued under $800 to enter the U.S. duty-free. Lululemon said it expects tariffs to cut its profit by $210 million for the year, with this figure rising to $320 million in 2026.
McDonald’s tenure was defined in part by a rapid global expansion that pushed Lululemon into more than 30 geographies and made China its second-largest market. But sales in its largest market, the U.S., have begun to slip. American revenue fell 2 percent last quarter, compared to a 33 percent jump in international sales.
Looking ahead, the next CEO will be tasked with executing a three-part turnaround plan focused on product creation, improving in-store and online experiences and boosting enterprise efficiency. “We believe these priorities position us well for the near term and will continue to set Lululemon up for long-term sustainable growth,” he told analysts.
McDonald’s departure comes after renewed public criticism from founder Chip Wilson, who launched Lululemon in 1998. In October, Wilson bought a full-page ad in The Wall Street Journal accusing the CEO and board of presiding over a “loss of cool,” comparing the company’s trajectory to “a plane crash.” Wilson resigned as the retailer’s chairman in 2013 after making controversial comments about customers’ bodies.
Wilson escalated his critique today. “I am deeply concerned about what appears to be a tremendous failure by the board to competently plan for the future and manage an effective succession process,” Wilson said, denouncing the board as one that has failed “to deliver product innovation and instead has led with complacency.”
