Lululemon CEO Calvin McDonald at the company's headquarters in 2023. Mr. McDonald will be leaving his role in January, following investor and analyst concerns about the company's growth prospects.DARRYL DYCK/The Canadian Press
Lululemon Athletica Inc. LULU-Q announced Thursday that chief executive officer Calvin McDonald will step down at the end of January, after leading the Vancouver-based retailer since 2018.
Mr. McDonald helped secure Lululemon’s position as a dominant player in athleisure. The company’s revenue nearly tripled during his time as CEO, from US$3.28-billion in fiscal 2019 to US$9.61-billion in 2024.
He oversaw its expansion into a wider selection of products and helped grow its international footprint.
Analysts and investors, however, have grown concerned about the company’s long-term growth prospects, leading its share price to be cut in half since the start of the year.
Here’s what to know about Mr. McDonald, his decision to step down, and what it means for the company.
Who is Calvin McDonald?
When Calvin McDonald took over as Lululemon CEO in August, 2018, the retailer was growing fast, particularly in the U.S.
Mr. McDonald, a London, Ont., native, arrived with a wealth of retail experience, having recently served as head of the Americas division for cosmetics retailer Sephora.
Mr. McDonald had a long resume of retail experience to before joining Lululemon in 2018.DARRYL DYCK/The Canadian Press
Earlier in his career, Mr. McDonald spent 17 years at Loblaw Cos. Ltd., including a period as executive vice-president, and served as CEO of Sears Canada.
Mr. McDonald arrived at Lululemon during a period of relative stability and growth, after the retailer had grappled with a number of setbacks under previous leadership.
Within his first year, Mr. McDonald introduced a plan to double the company’s men’s wear and e-commerce sales and quadruple its international sales within five years.
In 2022, having met its revenue and earnings goals early, the company set a new target: doubling men’s and digital revenues and quadrupling international revenues relative to 2021.
That meant growing overall revenue to US$12.5-billion by 2026. Meanwhile, sales are only expected to reach about US$11-billion this year.
Why is McDonald leaving as Lululemon CEO?
Lululemon remains a leader in athleisure, but some analysts and investors feel the company has lost some of its lustre.
It faces increased competition from newer rivals such as Alo Yoga and Vuori in the U.S., its most important market, as well as lower-priced options from established players such as Nike Inc. and Gap.
In September, Mr. McDonald acknowledged the retailer’s offerings had “become too predictable” and noted some “fatigue” among its most loyal customers as it kept certain styles around too long.
A Lululemon store in Vancouver. The company has faced new headwinds with U.S. President Donald Trump's tariffs affecting consumers.Isabella Falsetti/The Globe and Mail
The company has also been battered by macroeconomic shifts, including a pullback in spending among price-conscious consumers, U.S. President Donald Trump’s tariffs and the elimination of the de minimis exemption, which allowed packages worth US$800 or less to ship to the U.S. duty-free.
Though Lululemon’s revenue grew 7 per cent in its most recent quarter, compared to a year earlier, the retailer is relying heavily on sales outside North America for growth.
Its US$2.6-billion in third-quarter sales were driven by a 33-per-cent increase in international sales. Meanwhile, revenue from the Americas – its most important market – fell by 2 per cent in the quarter.
What does Lululemon founder Chip Wilson say about McDonald’s departure?
Before stepping down on Thursday, Mr. McDonald had come under fire from Lululemon founder Chip Wilson, who remains a major shareholder in the company.
Lululemon founder Chip Wilson remains a major shareholder in the company.JONATHAN HAYWARD/The Canadian Press
Last month, Mr. Wilson – who stepped down as Lululemon chair in 2013 after suggesting the bodies of some women were not right for Lululemon garments – took out a full-page ad in The Wall Street Journal, criticizing the company for its “loss of cool” and for supporting “finance focused CEOs” who do not understand product and design.
Even with Mr. McDonald now out as CEO, Mr. Wilson continues to put pressure on company leadership.
On Friday, he called for overhauling the board of directors, accusing management of leading with “complacency” and allowing Lululemon to lose its edge.
Mr. Wilson would like for the search for McDonald’s replacement to be led by new, independent directors.
With reports from Susan Krashinsky Robertson and the Canadian Press