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Pedro Goncalves writes:
Shares in the athleisure company Lululemon are up by 10% ahead of the US opening bell following the announcement that CEO Calvin McDonald will step down at the end of January after more than a year of lacklustre performance.
The company’s board said it is working with a “leading executive search firm” to identify McDonald’s successor. McDonald will remain with the company as a senior advisor until 31 March to ensure a smooth transition.
“The timing is right for a change,” McDonald said during a call with analysts. “I’ve described being CEO of Lululemon as my dream job. It truly has lived up to every expectation and given me the opportunity of a lifetime.”
Along with the leadership shake-up, Lululemon reported better-than-expected third-quarter results and announced a $1bn increase in its stock buyback programme. The company saw a 7% year-on-year rise in revenue to $2.6bn for the three months ending November 2. While international sales surged by 33%, US sales fell 2%.
During McDonald’s transition, chief financial officer Meghan Frank and chief commercial officer André Maestrini will serve as interim co-CEOs. Marti Morfitt, Lululemon’s chair, will take on an “expanded role” as executive chair.
Chip Wilson, Lululemon’s founder, sparked controversy two months ago when he said the company had suffered a “loss of cool”, attributing it to leadership that, in his view, could “speak Wall Street” but lacked the product-driven vision to attract and motivate creative talent.