Lululemon Athletica, the premium athletic apparel retailer renowned for its high-end yoga wear, announced the departure of Chief Executive Officer Calvin McDonald effective January 2025. McDonald’s exit concludes his seven-year leadership tenure during which the brand experienced both remarkable growth and recent market challenges.
The executive transition follows a period of significant volatility in Lululemon’s primary North American market, where sales performance has deteriorated substantially. The company’s stock valuation has plummeted approximately 50% over the past twelve months, reflecting investor concerns about increased competition and changing consumer preferences.
Despite these headwinds, Lululemon recently revised its annual revenue projections upward based on stronger-than-anticipated performance in recent months. This improvement has been largely driven by exceptional results in international markets, particularly China, where consumer demand remains robust.
McDonald characterized his departure as mutually agreed upon with the board of directors, coinciding with the completion of the company’s five-year strategic plan. In a statement published on LinkedIn, he emphasized the strength of Lululemon’s leadership team and the appropriateness of this timing for organizational change.
The company faces significant operational challenges, including newly imposed import tariffs that are projected to cost approximately $240 million annually. These tariffs particularly impact Lululemon’s supply chain, which relies heavily on manufacturing facilities in China, Vietnam, and other Asian countries.
Consumer behavior shifts present additional challenges, with shoppers increasingly seeking value alternatives amid economic pressures. This trend has benefited lower-priced competitors including Vuori and Alo Yoga, intensifying market competition.
Industry analysts note that Lululemon must reestablish its product differentiation and brand prestige. The company faced product quality issues in recent years, including the withdrawal of its Breezethrough leggings line following customer complaints about comfort and design flaws.
During McDonald’s tenure, Lululemon achieved substantial revenue growth and global brand expansion. Board Chair Marti Morfitt acknowledged his contributions in building “one of the strongest brands in retail” through innovative products and customer experiences.
The company has appointed Finance Chief Meghan Frank and Commercial Officer André Maestrini as interim co-CEOs while conducting a comprehensive search for permanent leadership.