• CEO Calvin McDonald will step down on January 31 after seven years.
• Lululemon's shares rose 10% following the leadership announcement.
• The brand faces declining sales in the U.S. while experiencing international growth.
• Chip Wilson's criticism of the company's strategy has influenced leadership changes.
• The company raised its annual profit forecast despite ongoing challenges.

Calvin McDonald, the CEO of Lululemon Athletica, has announced he will step down on January 31, 2025, after leading the company since 2018. This decision comes amidst a backdrop of declining sales in the U.S. market and intensifying competition from brands such as Alo Yoga. Following the announcement, Lululemon experienced a 10% surge in its share price during after-hours trading, indicating positive investor response despite the leadership transition. McDonald will remain as a senior adviser until March 31, 2026, to facilitate a smooth transition, with Reuters, India Times, and BBC.

Under McDonald's leadership, Lululemon faced significant hurdles, revealing a 2% revenue decline in the Americas while international revenue grew by 33%. The board is currently collaborating with an executive search firm to find McDonald’s successor, with finance chief Meghan Frank and chief commercial officer André Maestrini stepping in as interim co-CEOs. The leadership change is seen as a necessary response to the brand's struggles in its primary market, exacerbated by external pressures such as tariffs affecting imported goods, according to India Times and BBC.

Lululemon's financial forecast has improved despite these challenges, with management raising its annual profit expectation to between $12.92 and $13.02 per share, signaling a potential rebound during the holiday shopping season. Analysts remain cautious, noting that changes in leadership could introduce new strategies to boost sales amid increasing competition. The brand previously reported quarterly profits fell by 13% with tariffs estimated to cost the company approximately $240 million this year, affecting future profitability, as detailed by Reuters, India Times, and BBC.