CEO On Exit Mode, Down 40% In Just One Year: The curious case of Lululemon and Why The Stock In Trending For All Wrong Reasons

Lululemon Athletica has come under sharp market focus as its stock remains under pressure amid a founder-led board challenge, an upcoming CEO transition, and signs of slowing growth in its core market. Not just that, the stock has lost 40 per cent of its value in just one year.

The US-based athleisure company, which operates more than 700 stores globally, has seen heightened investor scrutiny after founder Chip Wilson moved to nominate new directors to the board ahead of the company’s next annual meeting.

The Lululemon Saga: Founder Pushes For Board Changes

Wilson, who founded Lululemon in 1998 and remains one of its largest shareholders, has proposed three independent board nominees, citing the need for stronger leadership oversight and long-term strategic clarity.

The nominations come as the company prepares for the departure of CEO Calvin McDonald, who is scheduled to step down in early 2026. Lululemon has acknowledged the nominations and said its board will review them as part of its governance process, while continuing its CEO search.

Stock performance and market reaction

Lululemon’s shares have declined significantly over the past year, underperforming broader US equity indices and several retail peers. The stock has faced pressure following weaker-than-expected demand in North America, which accounts for nearly three-fourths of the company’s revenue.

In its most recent full-year results, Lululemon reported revenue of over $9 billion, but flagged moderation in growth in its largest market, even as international segments showed stronger momentum.

The boardroom developments have added to investor caution, contributing to increased volatility in the stock in recent weeks.

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Competitive and cost pressures

The company operates in a highly competitive premium activewear market, facing pressure from both established global brands and newer direct-to-consumer labels.

At the same time, Lululemon has seen higher operating and marketing expenses, as companies across the retail sector increase spending to retain customers.

Margins and inventory levels remain closely watched indicators for analysts tracking the stock.

Activist attention and governance focus

Alongside the founder’s intervention, Lululemon has also drawn attention from activist investors, further intensifying focus on board composition, leadership succession, and capital allocation.

The company has stated that it remains focused on execution, product innovation, and international expansion, particularly in Asia-Pacific and China, which continue to post higher growth rates than North America.

Key factors investors are tracking
Markets are expected to closely monitor:
    •    The timeline and outcome of the CEO appointment
    •    Board decisions related to director nominations
    •    Sales performance in North America
    •    Margin trends amid rising competition and costs
Lululemon’s near-term stock movement is likely to remain linked to clarity on leadership and evidence of stabilization in its core business.