Canadian-born Lululemon leader Kelvin Macdonald will exit the company in January

Lululemon Athletica said CEO Kelvin McDonald is leaving the company without a replacement and raised its annual profit forecast, sending shares up nearly 10 percent in extended trading Thursday.

Canadian McDonalds studying at the University of Toronto and Western University will do so Withdraw from Lululemon in January after about seven years at the top,

Before taking the job at Lululemon, McDonald served as president and CEO of Sephora America. he was there before too Chairman and CEO of Sears Canada,

The Wall Street Journal, citing people familiar with the matter, reported that company founder Chip Wilson was frustrated with the marketing and was considering a proxy fight.

Known for its expensive leggings and athleisure clothing, Lululemon’s sales have been struggling in the U.S. as it has lost ground to emerging brands like Alo Yoga as well as private-label replicas, with executives noting in September that they were disappointed with its results and product execution in the country.

The change at the top is also the latest in a series of major changes in the C-suite for retailers as they seek to attract younger, more cautious audiences and deal with supply chain and operational issues.

The company also approved a US$1 billion increase in its stock buyback program.

2 Interim Co-CEOs

The company has named its finance chief Meghan Frank and chief commercial officer Andre Maestrini as co-interim CEOs while it searches for a new boss.

Lululemon did not immediately respond to a Reuters request for comment about the proxy fight report.

“Lululemon has struggled by its usual standards recently, so this is probably part of the CEO change,” said Morningstar Research analyst David Swartz. He nevertheless said that McDonald has been a very effective CEO.

“Lululemon’s hyper-growth days are clearly in the past — and that’s unlikely to change any time soon,” said Andrew Rocco, stock strategist at Zacks Investment Research.

“However, thanks to cheap basement valuations, a CEO shakeup and a promising start to the holiday season, bottom-line fishermen are betting on the stock.”

Lululemon now expects annual profit between $12.92 US and $13.02 US per share, down from a previous expectation of $12.77 US to $12.97 US per share, while it also raised its annual sales target.

It will now lose US$210 million in income from operations in 2025 due to the tariffs.

For quarter ending november 2The Vancouver-based company reported net revenue of US$2.57 billion.

This beat estimates of US$2.48 billion, according to data compiled by LSEG.

Emphasis on marketing

Officials also noted the strong start to the holiday shopping season with the Thanksgiving holiday period, but said demand has slowed since then.

Interim co-CEO Frank said on a post-earnings call that Lululemon will invest in marketing in the fourth quarter to help drive traffic and build brand awareness.

Discounts are also expected to be higher as it works to clear out old inventory.