Lululemon Athletica Inc.’s share price fell more than 13 per cent a day after the retailer named a new CEO.
The Vancouver-based company’s shares ended Thursday trading on the Nasdaq at about US$141.
The day before, Lululemon announced former Nike executive Heidi O’Neill will join the company as its next CEO and new board member on Sept. 8.
Laurent Vasilescu, senior analyst with BNP Paribas Equity Research, said Thursday’s price drop is a sign that the market is disappointed Lululemon chose O’Neill as its next CEO.
Given that Lululemon’s announcement credited her with helping to grow Nike from a $9-billion business into a $45-billion athletic brand, and quoted her as saying Lululemon is “in the early stages of its potential,” Vasilescu thinks she was chosen to be a growth CEO.
“At this juncture, Lululemon needs a turnaround CEO and not a growth CEO,” he wrote in a note to investors.
While the company remains one of the world’s most prominent athleisure brands, it’s lost some of its lustre in recent years. Competitors like Alo and Vuori have stolen away customers, shoppers have signalled Lululemon’s product lines have a lack of newness and markdowns have become more common at the brand.
It’s also faced increased criticism from shareholders, including estranged founder Chip Wilson and activist investor Elliott Management. Since Lululemon CEO Calvin McDonald announced he was stepping down in December, the shareholders have been lobbying for their own CEO and board member picks, claiming Lululemon needs to better address its lower share price and many competitors.
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Wilson and Elliott Management have yet to comment on O’Neill’s appointment.
Vasilescu said O’Neill joined Nike in 1998 and ran the company’s direct-to-consumer business, “which now is being de-emphasized after it did not unlock margins.”
She stepped down as Nike’s president of consumer, product and brand in May 2025 but has remained with the company in an advisory role since September 2025.
While Vasilescu was critical of her appointment, even going so far as to title his note to investors “Uh-Oh’Neill,” others saw her as a logical choice.
Neil Saunders, managing director at consulting and analytics firm GlobalData, pointed out she has experience in activewear and has sat on the boards of many customer service-focused companies like Spotify Technology and Hyatt Hotels.
“This will be helpful as Lululemon thinks beyond products to the wider impression the brand and its touchpoints have on customers,” he wrote in a Wednesday note to investors.
“The challenge will be to inject more energy and restore Lululemon as one of the leaders in terms of product innovation. This can be accomplished under O’Neill.”
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