Lululemon's CEO will step down as Q3 Americas revenue declined 2% and margins contracted.

Lululemon reported Q3 FY25 revenue growth of 7% to $2.6 billion, driven entirely by international strength as the Americas region declined. The company announced CEO Calvin McDonald will depart in early 2026, and it issued Q4 guidance that implies a year-over-year revenue decline. Gross and operating margins contracted significantly, leading to diluted EPS of $2.59, down from $2.87 in the prior year.

Key Highlights

• The company announced that CEO Calvin McDonald will step down effective January 31, 2026, with a search for a replacement now underway.
• Performance diverged sharply by region, as Americas net revenue fell 2% with comparable sales down 5%, while International net revenue surged 33%.
• Gross margin contracted by 290 basis points to 55.6% and operating margin fell 350 basis points to 17.0%, with the company guiding for a Q4 revenue decline of 1% to 3%.
• The board authorized a $1.0 billion increase to the company's stock repurchase program, bringing the total remaining authorization to approximately $1.6 billion.