By Juveria Tabassum and Sanskriti Shekhar
Dec 11 (Reuters) – Lululemon Athletica said on Thursday that its CEO Calvin McDonald will step down in January after about seven years at the helm as the yogawear maker navigates a challenging consumer environment in the United States.
The shakeup at the top is the latest in a string of big changes in C-suites for retailers as they look to capture a younger, more cautious audience and wade through supply chain and operational issues.
The company named its finance chief Meghan Frank and chief commercial officer André Maestrini as co-interim CEOs while it searches for its new boss. The Wall Street Journal reported, citing people familiar with the matter, that the company’s founder Chip Wilson was frustrated with marketing and had been considering a proxy fight for board changes at Lululemon.
Lululemon did not immediately respond to a Reuters request for comment.
“Lululemon has struggled lately by its usual standards so that’s probably part of the CEO change. Even so, McDonald has been a very effective CEO overall. The company has had its best years under his guidance,” said David Swartz, analyst at Morningstar Research.
Still, the company’s shares were up 9.7% in extended trading as it lifted its annual profit forecast, helped by stronger sales in international markets such as China, and approved a $1 billion increase to its stock buyback program.
Known for its pricey leggings and athleisure clothing, Lululemon’s sales have struggled in the U.S. as it lost ground to upstart brands such as Alo Yoga as well as private-label replicas, with executives noting in September that they were disappointed with its results and product execution in the country.
The yogawear retailer now expects annual revenue between $10.962 billion and $11.047 billion, compared with its prior forecast of $10.85 billion to $11 billion.
Lululemon now expects annual profit between $12.92 and $13.02 per share, compared with previous expectations of $12.77 to $12.97 apiece.
It now expects a $210 million hit to its income from operations in 2025 due to tariffs.
For the quarter ended November 2, the company reported net revenue of $2.57 billion, beating estimates of $2.48 billion, according to data compiled by LSEG.
(Reporting by Juveria Tabassum and Sanskriti Shekhar in Bengaluru; Editing by Alan Barona)
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