lululemon sport Inc. said Thursday that its Chief Executive Officer Calvin McDonald will resign effective Jan. 31 as the sportswear maker grapples with a year of disappointing sales.
The Vancouver, Canada-based company said McDonald’s and the board are working together to achieve a “smooth transition” and that he will serve as a senior advisor to the company until March 31, 2026.
The board said it is conducting a comprehensive search in partnership with a leading executive search firm to select his successor. McDonald took the helm in 2018.
Lululemon said board chairman Marti Morfitt will assume the expanded role of executive chairman effective immediately to “ensure continued execution of the company’s near- and long-term growth strategy during the leadership transition.”
Additionally, the company said Chief Financial Officer Meghan Frank and Chief Commercial Officer André Maestrini will serve as interim co-CEOs following McDonald’s exit.
The announcement coincided with Lululemon’s third-quarter results, which showed continued downturn in the U.S. market, with net revenue in the Americas falling 2% while international revenue grew 33%.
Quarterly profits fell 13%.
Lululemon has been grappling with a host of issues, such as rising costs due to President Donald Trump’s tariffs and stiff competition from companies like Alo Yoga. The brand is known for its simple workout outfits worn by Kendall Jenner and Hailey Bieber. Meanwhile, Lululemon founder Chip Wilson has been an outspoken critic of the company’s direction.
“The brand’s past effortlessly executed flawless posture has been replaced by a more scrappy posture that has been in place for quite some time,” Neil Saunders, managing director at GlobalData Retail, wrote in a note released Thursday.
Sanders pointed out that Lululemon faces three problems: The athleisure market is weaker than before and competition is “more intense and higher-level.” He also said that against this backdrop, Lululemon’s execution has declined.
He noted that Wilson’s criticism of the company put McDonald’s in a difficult position, which he cited as one of the reasons for his exit.
After the news was announced, the company’s stock price rose more than 10% in after-hours trading on Thursday.