U.S. stocks reopen after the weekend at 9:30 a.m. ET on Monday, Dec. 22, 2025—and lululemon athletica inc. (NASDAQ: LULU) is one of the most closely watched retail names heading into the holiday-shortened week. Trading conditions can also get choppier as liquidity thins into Christmas: the NYSE and Nasdaq are scheduled to close early at 1:00 p.m. ET on Wednesday, Dec. 24, 2025, and markets will be closed on Thursday, Dec. 25. [1]
What’s driving the attention isn’t just holiday demand. Lululemon is navigating a rare combination of CEO succession, activist investor pressure, and a tariff/de minimis cost headwind that management says has already hit profitability—and could keep weighing on margins into 2026. [2]
Where Lululemon shares stand heading into Monday’s session
Lululemon stock finished the last full session before Monday’s open at $209.45 on Friday, Dec. 19, after a volatile stretch that included a sharp pop following CEO-succession headlines earlier in December. [3]
The longer-term context remains stark: multiple major outlets have described the stock as down sharply in 2025 and still far below its 2023 peak, which is why leadership decisions—and signs of a credible U.S. recovery—carry extra weight right now. [4]
The headline catalyst: CEO exit and an interim leadership team
On Dec. 11, 2025, Lululemon announced a CEO succession plan: Calvin McDonald is set to step down as CEO and as a board member effective Jan. 31, 2026, then remain a senior advisor through March 31, 2026. [5]
Key operational implication for investors: the company won’t be “leaderless,” but it will be run day-to-day by a temporary structure while the board searches for a permanent CEO:
- CFO Meghan Frank and Chief Commercial Officer André Maestrini will serve as interim co-CEOs
- Board Chair Marti Morfitt moved into an expanded Executive Chair role
- The board says it is conducting a CEO search with an executive search firm [6]
In practical terms, Monday’s premarket setup is less about a single earnings datapoint (those were already released) and more about whether investors see this transition as a stabilizer—or as a period of distraction at a moment when the U.S. business needs sharper product and brand execution.
Activist pressure rises: Elliott’s reported $1+ billion stake
The other major overhang (and potential catalyst) is activist involvement.
Reuters reported that activist investor Elliott Management has built a stake of more than $1 billion in Lululemon and has been working with retail executive Jane Nielsen (formerly a senior executive at Ralph Lauren) as a potential CEO candidate. Reuters also described Elliott as now among Lululemon’s biggest investors, with the development arriving as the company searches for a permanent CEO. [7]
A separate Financial Times commentary framed Elliott’s involvement as potentially more “stabilizing” than disruptive—important because a prolonged proxy fight is exactly what many retail investors fear during a turnaround effort. [8]
Why this matters for Monday’s trade
Activist situations can move quickly, especially around CEO searches. Traders will be watching for:
- Any sign Elliott pushes publicly (or files) for governance or management change
- Any indications the board’s search narrows toward a specific candidate
- Any escalation of tensions between major shareholders and the board [9]
The fundamentals: Q3 results beat on revenue, but margins remain the pressure point
Lululemon’s most recent earnings update (for the quarter ended Nov. 2, 2025) delivered mixed signals:
What improved
- Net revenue rose 7% to $2.6B
- Growth was driven by International revenue up 33%, while Americas revenue fell 2%
- Comparable sales rose 1% overall (International +18%; Americas -5%)
- The company ended the quarter with 796 stores after opening 12 net new company-operated stores [10]
What pressured the stock narrative
- Gross margin fell 290 basis points to 55.6%
- Operating margin fell 350 basis points to 17.0%
- Diluted EPS was $2.59 (down from $2.87 a year earlier) [11]
And while management said it was “encouraged” by early holiday performance, Reuters reported that executives also pointed to slowing demand after the Thanksgiving period, a more price-sensitive consumer, and the need for higher discounting to clear aged inventory. [12]
The outlook: Guidance now includes a defined tariff + de minimis hit
For investors positioning ahead of Monday’s open, the most “actionable” forecast remains management’s own guidance, which embeds the company’s latest assumptions on costs and demand.
From Lululemon’s Dec. 11 outlook:
Q4 2025 guidance
- Revenue $3.500B to $3.585B
- EPS $4.66 to $4.76 [13]
Full-year 2025 guidance
- Revenue $10.962B to $11.047B
- EPS $12.92 to $13.02 [14]
Most notably, the company stated that 2025 guidance includes an estimated ~$210 million reduction in income from operations tied to higher U.S. tariffs and the removal of the “de minimis” exemption, net of mitigation actions like vendor savings and pricing. [15]
The de minimis issue, explained simply (and why it’s a real margin risk)
The “de minimis” exemption matters because it affects cross-border shipment costs and customs friction—especially for e-commerce.
In its Form 10‑Q, Lululemon said:
- Many U.S. e-commerce orders have historically been fulfilled from distribution centers in Canada, with a significant proportion qualifying for de minimis
- Removal of the exemption increases fulfillment costs
- Tariff and de minimis changes have already reduced operating income and are expected to keep doing so [16]
Lululemon also disclosed in that filing:
- The impact of increased tariffs (net of mitigation) reduced income from operations by about $60M in the first three quarters of 2025
- The company estimates tariffs + de minimis removal will reduce 2025 income from operations by about $210M, net of mitigation
- The filing outlines a timeline of changes to the de minimis exemption, including broader extensions and a longer-term legislative phaseout [17]
For Monday’s premarket narrative, this is crucial: even if demand stabilizes, investors are still weighing whether structural cost pressure forces Lululemon to accept lower margins—or whether pricing/vendor actions can meaningfully offset the hit.
What the “turnaround debate” is really about: regaining U.S. momentum
Across recent coverage, the recurring theme is that Lululemon’s challenges look less like a balance-sheet problem and more like a brand/product-cycle and U.S. demand problem in a crowded athleisure market.
Reuters described intensifying competition from newer brands (including Alo Yoga and Vuori) and also pointed to lower-priced competition from larger players. [18]
Earlier in 2025, Reuters reported “sales fatigue” in key items and the need to accelerate innovation—an issue that keeps resurfacing now because a new CEO will be judged quickly on whether product “newness” returns without excessive discounting. [19]
Holiday-week trading setup: what to watch beyond headlines
Because the week includes an early close and a full holiday shutdown, price moves can be exaggerated by lower volume. Kiplinger notes that regular NYSE/Nasdaq hours are 9:30 a.m. to 4:00 p.m. ET, and also highlights that liquidity tends to be lower in premarket and after-hours sessions. [20]
Here are the practical catalysts investors will be monitoring during (and immediately after) Monday’s open:
- Any new public signal from Elliott (or leaks about CEO-candidate preferences) [21]
- Any board/CEO-search updates as Jan. 31, 2026 approaches for McDonald’s exit [22]
- Discounting intensity and “cleaning aged inventory” commentary (a key driver of gross margin) [23]
- Tariff/de minimis developments and how quickly mitigation can offset costs [24]
- International vs. Americas performance—the divergence is now central to the investment case [25]
Bull case vs. bear case for LULU right now
Reasons bulls stay interested
- International growth is still strong (recent quarter: International revenue +33%) [26]
- The board authorized an additional $1.0B to the buyback program, with ~$1.6B remaining authorized as of Dec. 11 [27]
- Activist involvement can accelerate strategic clarity (or leadership selection) [28]
Reasons bears remain cautious
- The U.S. business is still shrinking in the latest quarter (Americas revenue down; Americas comps down) [29]
- Margin compression has been significant (gross and operating margin declines year over year) [30]
- The company itself is quantifying a major cost headwind (tariffs + de minimis) that may not be fully offset [31]
Bottom line before the Dec. 22 open: Lululemon stock is trading in a “story stock” environment again—where leadership and activism headlines can move shares as much as the underlying quarterly numbers. Going into Monday, the market is balancing (1) buybacks and international growth, against (2) margin pressure from tariffs/de minimis and (3) uncertainty around a permanent CEO choice. [32]
References
1. www.kiplinger.com, 2. www.sec.gov, 3. www.investing.com, 4. www.reuters.com, 5. www.sec.gov, 6. www.sec.gov, 7. www.reuters.com, 8. www.ft.com, 9. www.reuters.com, 10. corporate.lululemon.com, 11. corporate.lululemon.com, 12. corporate.lululemon.com, 13. corporate.lululemon.com, 14. corporate.lululemon.com, 15. corporate.lululemon.com, 16. www.sec.gov, 17. www.sec.gov, 18. www.reuters.com, 19. www.reuters.com, 20. www.kiplinger.com, 21. www.reuters.com, 22. www.sec.gov, 23. www.reuters.com, 24. www.sec.gov, 25. corporate.lululemon.com, 26. corporate.lululemon.com, 27. corporate.lululemon.com, 28. www.reuters.com, 29. corporate.lululemon.com, 30. corporate.lululemon.com, 31. www.sec.gov, 32. corporate.lululemon.com
