Calvin McDonald is stepping down as CEO of Lululemon Athletica Inc. after a remarkable run that saw revenues triple. Despite a recent falter in the business, McDonald leaves a legacy of growth and a focus on sport. The board will now search for a new CEO to lead the company forward.
Founder Chip Wilson, who still owns a stake in Lululemon, has been critical of the current leadership, claiming the board prefers finance-focused CEOs over product-driven ones. Wilson’s influence on the company’s future remains uncertain as the board looks to choose the next CEO.
McDonald’s departure is not the only high-level exit at Lululemon, with other executives leaving for new opportunities. The board has appointed two interim co-CEOs to lead the company during the transition period and established a CEO search committee to find a permanent replacement.
Despite challenges in recent product launches and executive departures, McDonald remains optimistic about Lululemon’s future. He will receive a severance payment as he transitions out of the CEO role, with the board recognizing his contributions to the brand’s growth and success. Lululemon’s CEO, Calvin McDonald, is stepping down to facilitate a smooth transition, amid the company’s recent struggling stock performance. The market capitalization has dropped by $42 billion in two years, with North American business slowing. Despite surpassing expectations, operating income and margins have decreased, with diluted earnings per share falling.
The company’s operating income for the quarter has fallen, and the net income and diluted earnings per share have also decreased. Inventories have increased by 11%, valued at $2 billion, with full-year revenue expected to grow by 5 or 6%. The results are described as “soft” by industry experts, prompting the exit of the CEO.
Investors are more optimistic about Lululemon after news of changes in the C-suite, leading to a 10.4% increase in share prices. While the brand has seen success internationally, domestic growth has slowed, impacting the overall performance. The company’s founder has criticized the brand’s direction, contributing to the CEO’s resignation.
Read more at finance.yahoo.com: Calvin McDonald Is Out at Lululemon