Lululemon Attracts $1 Billion Investment from Elliott, Hastens CEO Succession Plan

Lululemon moves forward in pivoting to its new leadership. Activist fund Elliott Investment has taken a stake of more than $1 billion in Lululemon Athletica with the intention of driving changes at the top. The news has buoyed the Canadian company’s share price and the stock has rallied around 6% on Wall Street.

According to U.S. media reports, the activist fund wants to shore up the company’s recovery and has already sounded out a candidate to take the helm. Jane Nielsen, former CFO of Ralph Lauren, is the name best positioned to lead the new phase of the company based in Vancouver (Canada).

The move comes on the heels of Lululemon CEO Calvin McDonald’s scheduled departure on January 31st, 2026. The company has articulated a transition with Marti Morfitt as executive chairman and Meghan Frank (chief financial officer) and André Maestrini (chief commercial officer) as interim co-CEOs, while McDonald will remain as an advisor until March 31st.

Lululemon faces the transition under the close scrutiny of its founder, Chip Wilson

Tension around the succession has intensified in recent months, with Chip Wilson, Lululemon’s founder, expressing in October that he valued an activist campaign to replace board members. Although he retired from the board more than a decade ago, the entrepreneur retains about 9% of the equity and has criticized the transition process.

Investors, for now, have validated the move. In the last month, the company has risen 27% in the stock market, although the stock accumulates a 45% drop in 2025. The market is pointing to a slowdown after the pandemic push, with tougher comparisons, more competition and a gradual shift away from lifestyle trends associated with athleisurewear.

Readings on Nielsen’s possible arrival also diverge. Barron’s picks up the endorsement of Tom Nikic (Needham), who highlights his role in turnarounds at other companies, while Randal Konik (Jefferies) warns that Lululemon’s turnaround may be long and complex.

Beyond the noise at the top, Lululemon raised its turnover by 7% in the third quarter to $2.565 billion and reduced its net profit by 12.8% to $306.8 million. In the first nine months of the current fiscal year, the company increased its sales by 7%, to $7.46 billion, while cutting its net profit by 6.9%, to $992.3 million.

For the fourth quarter, the company expects to achieve a turnover of between 3,500 million and 3,585 million, which will represent a decrease of between 3% and 1% and, for the year as a whole, it estimates sales of between 10,962 million and 11, 047 million.The Canadian company also anticipates an impact of approximately 210 million on operating income due to U.S. tariffs and the elimination of the de minimis exemption, among other factors.