Lululemon tops Street as CEO search continues; adds former Levi’s CEO to board
Lululemon Athletica Inc.'s fourth-quarter earnings and sales topped estimates as international growth surged, but the company offered disappointing guidance amid higher expenses, including tariff costs.
The activewear retailer reported its results as it continues to search for a leader to replace CEO Calvin McDonald, who stepped down in January as the company struggled in its home market. Founder Chip Wilson, who is also one of Lululemon’s largest shareholders, has been very vocal in his criticism of the company’s performance and is waging a proxy fight to remake the board with three candidates.
[READ MORE: Lululemon founder launches website in ongoing battle for change]
In separate news, the retailer announced the appointment of Chip Bergh, former president and CEO of Levi Strauss & Co., to its board, effective immediately. He will stand for election at Lululemon's 2026 annual shareholders meeting in lieu of David Mussafer, who has notified the company that he does not intend to stand for re-election at the conclusion of his current three-year term.
“Chip Bergh's appointment is the result of a process that began with our last board skills assessment, and reflects our commitment to thoughtful, ongoing refreshment,” said executive chair Marti Morfitt. “We remain focused on progressing the search for Lululemon's next CEO, overseeing the development and execution of the company's plans, and taking steps to drive long-term, sustainable growth and shareholder value creation."
In a statement, Wilson called Mussafer’s decision not to seek re-election a “wecome change,” saying that his influence on the board “has long impeded change.” But he was critical of the appointment of new director Bergh.
“Bergh's resume from the companies he has led and on whose boards he has served have struggled for years against their peers,” Wilson stated. “We would have voiced our concerns prior to this announcement, however, the Lululemon board did not engage with us nor invite us to meet with Bergh during his interview process.”
Fourth Quarter
Lululemon’s fourth-quarter performance showed that the company is still challenged on its home turf.
Net revenue rose 1% to $3.64 billion for the quarter ended Feb. 1, ahead of estimates for $3.58 billion. Americas net revenue decreased 4%, or 5% on a constant dollar basis. International net revenue increased 17%, or 14% on a constant dollar basis.
Comparable sales increased 3%. Comp sales in the Americas decreased 1%, or 2% on a constant dollar basis. International comp sales increased 20%, or 16% on a constant dollar basis.
The company’s net income totaled $586.9 million, or $5.01 per share, compared with $748.4 million, or $6.14 per share, in the year-ago period. Analysts had expected earnings of $4.78 per share.
Full Year
For the full year, Lululemon’s net revenue increased 5% to $11.1 billion.
Net revenue was down 1% in the Americas. International net revenue rose 22%. Comparable sales increased 2%. Comps fell 3% in the Americas. International comparable sales increased 15%.
Diluted earnings per share were $13.26 in 2025 compared to $14.64 in 2024.
“As we begin our new fiscal year, we are focused on executing on our action plan, offering new and differentiated products to our guests, and elevating their experiences with Lululemon,” stated Meghan Frank, interim co-CEO and CFO. “Driving improvement in our full-price sales over the course of 2026 is also a key priority, particularly in North America, and will enable us to enhance our brand health and deliver long-term growth and value creation for shareholders."
Lululemon expects tariffs to cost it $380 million in 206, up from $275 million last year, on a gross basis. With mitigation efforts are taken into account, the net impact is expected to be $220 million in 2026, up from $213 million in 2025.
For 2026, the company expects net revenue to be in the range of $11.350 billion to $11.500 billion, reflecting growth of 2% to 4%. Diluted earnings per share are expected to be in the range of $12.10 to $12.30 for the year.
Lululemon opened 15 net new company-operated stores during the quarter, ending with 811 stores.
