Lululemon CEO Calvin McDonald to Step Down: What It Means for LULU Stock Price, Earnings Outlook, and Wall Street Forecasts (Dec. 12, 2025)

Lululemon Athletica (NASDAQ: LULU) is heading into 2026 with a major leadership transition—and investors are trying to decide whether this is the reset the brand needs, or another sign that its North American growth engine is still sputtering.

Late Thursday, the company confirmed that CEO Calvin McDonald will step down at the end of January 2026, kicking off a formal CEO search while two senior executives share interim leadership. The news landed alongside third-quarter fiscal 2025 results that beat expectations on revenue and EPS, helped by international strength (especially China), even as U.S. trends remained soft and margin pressure persisted. ^[1]

By Friday morning (Dec. 12, 2025), the market’s immediate question wasn’t just “who’s next?”—it was what a CEO change, higher tariffs, more promotional activity, and a rebuilding product pipeline mean for Lululemon’s stock price from here.

LULU stock price today (Dec. 12, 2025)

As of 10:53 UTC on Friday, Dec. 12, 2025, Lululemon shares were trading around $187.01, with a market capitalization near $19.35 billion (based on the latest quote available at the time of writing).

In the prior session’s extended trading, shares jumped after the company paired a quarterly beat with a CEO succession announcement and an expanded buyback authorization—an abrupt tone shift after months of pressure on the stock and questions about execution in the U.S. ^[2]

What happened: Calvin McDonald’s departure and the interim CEO plan

Lululemon says Calvin McDonald will step down as CEO and as a board member effective Jan. 31, 2026, and then remain a senior advisor through March 31, 2026 to support the transition. ^[3]

Key leadership changes outlined by the company:

The board is running a comprehensive CEO search with an external executive search firm. ^[4]
Board Chair Marti Morfitt is taking on an expanded role as Executive Chair, effective immediately. ^[5]
CFO Meghan Frank and Chief Commercial Officer André Maestrini will serve as interim co-CEOs during the search. ^[6]

This interim structure is a clear signal that the board wants continuity in day-to-day operations—while also acknowledging that the next phase likely requires a leader with turnaround credibility.

Who is Calvin McDonald—and what’s his legacy at Lululemon?

Calvin McDonald has led Lululemon since 2018, during a period the company itself describes as transformational in global expansion and revenue scale. In its succession announcement, Lululemon said that annual revenue more than tripled during his tenure, the brand expanded to 30+ geographies, and China Mainland grew into Lululemon’s second-largest market. ^[7]

The company also credits McDonald with broadening the product portfolio—citing expansion into activities such as tennis and golf—and positioning Lululemon for continued global growth. ^[8]

But the market narrative around his exit is equally shaped by what hasn’t worked lately: a tougher U.S. demand backdrop, elevated competition in athleisure, and persistent investor frustration with product “newness,” merchandising, and brand heat—issues that have been cited repeatedly in media coverage and analyst commentary tied to this week’s earnings cycle. ^[9]

The earnings backdrop: Q3 fiscal 2025 highlights

Lululemon’s third-quarter fiscal 2025 report (quarter ended Nov. 2, 2025) shows a company that is still growing—but increasingly bifurcated by geography.

Top-line and comps

Net revenue +7% to $2.6B ^[10]
Americas net revenue -2% ^[11]
International net revenue +33% ^[12]
Comparable sales +1% (or +2% constant-dollar), with Americas comps -5% and International comps +18% ^[13]

Profitability and EPS

Gross margin fell 290 bps to 55.6% ^[14]
Operating margin fell 350 bps to 17.0% and income from operations fell 11% to $435.9M ^[15]
Diluted EPS: $2.59 (vs. $2.87 a year earlier) ^[16]

China strength stood out

Within the company’s regional disclosures, China Mainland net revenue increased 46% year over year, helping drive the overall international result. ^[17]

This split—China/international strength versus U.S. softness—is central to nearly every “what’s next” debate around LULU stock right now.

Guidance and forecasts: what Lululemon expects next

Lululemon raised its full-year outlook modestly and gave a fourth-quarter range that implies a softer near-term trajectory—especially once you account for calendar effects and a more promotional environment.

Q4 fiscal 2025 guidance

Revenue: $3.500B to $3.585B ^[18]
Diluted EPS: $4.66 to $4.76 ^[19]

Full-year fiscal 2025 guidance

Revenue: $10.962B to $11.047B ^[20]
Diluted EPS: $12.92 to $13.02 ^[21]

Tariffs and “de minimis” are now a major swing factor

One of the most market-moving lines in the outlook: Lululemon says its 2025 guidance includes an estimated ~$210 million reduction in income from operations tied to assumptions around higher U.S. tariffs and the removal of the de minimis exemption, net of mitigation steps such as vendor savings and pricing actions. ^[22]

That’s not just a one-quarter headline—investors are increasingly treating trade policy, duty exposure, and sourcing flexibility as structural variables in apparel margins.

Buybacks: the board adds $1B more repurchase capacity

Alongside results, the company leaned into capital return.

Lululemon repurchased 1.0 million shares in Q3 for $189.0M. ^[23]
On Dec. 3, 2025, the board approved a $1.0B increase to the stock repurchase program. ^[24]
As of Dec. 11, 2025, Lululemon said it had about $1.6B remaining authorized under the program. ^[25]

In plain terms: the board is trying to put a floor under investor confidence while the CEO search runs.

Why Lululemon is changing its CEO now

The company’s official framing emphasizes an orderly succession process, and it highlights McDonald’s growth-era achievements. ^[26]

But the broader reporting and analysis published around Dec. 11–12 points to a more urgent undercurrent:

U.S. demand and market share challenges have been a recurring theme. Reuters reported that the company has acknowledged disappointment with product execution and has faced tougher competition in athleisure. ^[27]
The Associated Press cited analysis suggesting a weaker athleisure market, more intense competition, and a decline in execution quality. ^[28]
Business Insider highlighted ongoing critiques of in-store experience and merchandising density—and said the company is testing a less cluttered store approach in Los Angeles and Miami. ^[29]
Bloomberg’s opinion coverage argued that restoring “cool” will be difficult even with leadership change, particularly with founder pressure in the background. ^[30]

This is the context in which the next CEO will be chosen: not just to manage a global growth brand, but to re-ignite the core engine—women’s apparel in North America—without losing momentum internationally.

Wall Street price targets and analyst calls on Dec. 12, 2025

In the hours after earnings and the CEO announcement, several research notes and media summaries surfaced with fresh price targets—often paired with a cautious “turnaround takes time” message.

Evercore ISI: target raised, but with a wait-and-see stance

Investing.com reported that Evercore ISI raised its price target to $215 from $180, while keeping an “In Line” rating. The note also referenced updated EPS estimates and the view that a turnaround may take time amid U.S. deceleration and intensifying competition. ^[31]

Jefferies: upgrade to Hold after the CEO news

Jefferies upgraded Lululemon to Hold from Underperform and raised its price target to $170 from $120, describing the CEO departure as a meaningful positive and noting that Q3 met reduced expectations. ^[32]

Truist: higher target, same rating—China strength noted, U.S. issues remain

Truist raised its price target to $200 from $170 while maintaining Hold, pointing to China strength and less tariff impact than feared, but warning that product freshness and competition could be difficult to fix quickly—especially during a leadership transition. ^[33]

Operational fixes in focus: product “newness,” store experience, and discounting

A CEO transition doesn’t fix merchandising overnight, so investors are looking for evidence that operational changes are already in motion.

1) Stores: dialing back “clutter”

Business Insider reported Lululemon plans to reduce product density in stores and tailor assortments locally, aiming to improve visual merchandising—an initiative the company said is being tested in markets including Los Angeles and Miami. ^[35]

2) Discounts: clearing aged product lines

Reuters reported Lululemon expects discounts to be higher as it works through older product lines and that it plans inventory units below sales in 2026. ^[36]

3) Marketing: stepping on the gas

Reuters also reported the company plans increased marketing in the fourth quarter to drive traffic and build awareness—an area that has been central to outside criticism. ^[37]

Balance sheet and inventory: why investors are watching working capital

Lululemon ended Q3 with:

$1.0B in cash and cash equivalents, and
Inventory up 11% to $2.0B (units up 4%). ^[38]

Rising inventory isn’t automatically negative in retail—it can reflect growth initiatives or timing—but combined with talk of heavier discounting, it becomes a key indicator of whether the brand is moving product cleanly or relying on promotions.

The big risks and catalysts for LULU stock into 2026

Here’s what the Dec. 12 news cycle makes most “watchable” for investors and shoppers alike:

Catalysts

Permanent CEO hire: the quality and credibility of the next leader could reset the narrative quickly. ^[39]
International scaling (especially China): continued outsized growth abroad has become the core offset to U.S. softness. ^[40]
Buybacks: with ~$1.6B remaining authorized, repurchases could support EPS and sentiment if executed aggressively. ^[41]

Risks

U.S. demand weakness and competition: Reuters and AP both pointed to intensifying competition and softer consumer behavior in the U.S. apparel category. ^[42]
Tariff and customs headwinds: the company explicitly modeled a ~$210M operating-income drag under its tariff assumptions. ^[43]
Margin pressure: Q3 gross and operating margin declines show how quickly profitability can compress even with revenue growth. ^[44]

Bottom line: a CEO change creates a “reset moment,” but the stock still needs proof

On Dec. 12, 2025, Lululemon is sending two messages at once:

The business is still growing globally, with international (and China in particular) providing real momentum. ^[45]
The board wants urgency in the turnaround, and a CEO transition—plus a bigger buyback—signals that patience for a slow U.S. fix is wearing thin. ^[46]

For LULU stock, the near-term direction may hinge on whether interim leadership can stabilize U.S. product and merchandising execution while the board recruits a permanent CEO—without sacrificing the international growth story that is currently doing much of the heavy lifting.

Market note: Stock prices move quickly. The LULU price referenced above reflects the latest quote available at the time of writing on Dec. 12, 2025.

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