Bold update: Lululemon is charting a new course as CEO Calvin McDonald will depart effective January 31, with a transition plan in motion to keep the company on track.
Lululemon announced on Thursday that McDonald will step down after seven years at the helm, following a year where the company fell short of its performance goals. The board has launched a search through a leading executive recruitment firm to identify the next chief executive, and McDonald will remain with the company as a senior advisor through March 31 to help ensure a smooth switch.
McDonald expressed pride in the team’s achievements and the strides made during his tenure. In a news release, he stated, “Leading lululemon has been the highlight of my career, and I am incredibly proud of everything our team has accomplished over the last seven years. Together, we have transformed the athletic apparel industry, and the opportunities ahead for lululemon are substantial. I believe the strong product pipeline we’ve built and the action plan we’ve implemented will yield positive results and deliver value to shareholders in the months and years ahead.” He also pledged full support for the transition in his advisory role.
The company has faced pressure over the past year from tariff impacts, softer U.S. consumer demand, and a product lineup that hasn’t excited shoppers as much as before. It also confronts growing competition in the athleisure space from brands like Vuori and Alo Yoga, alongside a broader shift in consumer tastes—from yoga pants to more denim-inspired options.
To spur growth and broaden its appeal, Lululemon has been pushing international expansion and a more diversified product range. Beyond workout gear, the company has introduced footwear, outerwear such as coats and jackets, and casual pants suitable for work.
While overall revenue trends are positive, much of that growth has come from international markets and new store openings, with its biggest market, the Americas, experiencing a decline.
Compounding the headwinds is the phasing out of the U.S. de minimis exemption for duty-free entry of low-value packages, a change that has hit Lululemon more than some peers.
In September, the company projected that tariffs would reduce full-year profits by about $240 million, with most of the impact linked to the end of the de minimis exemption.
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