VANCOUVER – Lululemon Athletica Inc. announced a CEO transition while reporting its third-quarter earnings as the company looks to turn around its U.S. business and navigate the current tariff environment.
CEO Calvin McDonald will be stepping down from his role effective Jan. 31, according to a press release from the company on Thursday. Lululemon CFO Meghan Frank and COO André Maestrini will serve as interim co-CEOs as the company searches for its next leader.
“In my conversations with the board, we carefully considered what’s ahead for the company and for my own journey. Together we agreed that the timing is right for a change as we near the end of our five-year plan cycle,” McDonald said on an earnings call Thursday.
McDonald had been at the helm of the company for seven years and will serve as a senior advisor to the company through March 31 of next year. Lululemon’s board of directors are currently searching to identify its next CEO.
He added that the company’s current product mix, particularly in North America, does not reflect the company’s vision for the future, with changes in the works.
“I believe that we have a strong pipeline of innovation and approach to new style creation. You’ll see the impact of this work beginning in spring 2026 and continue to strengthen throughout the year,” he said.
Frank said on the call that the company is working to “drive acceleration” in its U.S. business, while maintaining momentum in its international regions.
“We began this work last year as we saw the U.S. business slow, and we expect to see the most significant benefits of our work streams in 2026,” she said.
During the third quarter, Lululemon said revenue fell in its U.S. and Canadian businesses by three and one per cent, respectively. In contrast, the company saw a 46 per cent rise in its revenue from mainland China.
Frank also noted the company is continuing to navigate tariffs.
“We’re taking actions in both the near term and long term to mitigate the increased tariff costs. These include strategic pricing actions, supply chain initiatives, including vendor negotiations and DC (distribution center) network efficiency, and enterprise-wide savings initiatives,” she said.
In September, while reporting its second-quarter results, Lululemon updated its guidance for 2025 with an estimated reduction in gross profit, reflecting the impact of tariffs and the removal of the de minimis exemption, which had allowed packages worth US$800 or less to ship south of the border without duties.
“We now expect a 220-basis-point, or approximately US$240-milion, mitigated impact on gross margin for the year,” Frank said at the time.
Lululemon reported net income of US$306.8 million during its third quarter, down from US$351.9 million during the same period last year.
It amounted to earnings per diluted share of US$2.59 for the quarter, down from US$2.87 in the prior quarter.
The Vancouver-based company, which keeps its books in U.S. dollars, reported its revenue reached US$2.6 billion during the third quarter, up seven per cent from US$2.4 billion last year.
The company’s board of directors also approved a US$1 billion increase to its stock repurchase program.
This report by The Canadian Press was first published Dec. 11, 2025.
