Calvin McDonald, CEO of Lululemon, is stepping down from that role at the end of January, the company announced Thursday.
McDonald is also stepping down from the board of directors and will serve as an advisor to the company through March.
Lululemon's board is conducting a "comprehensive search process" for its next CEO, the company said.
Marti Morfitt, the board chair, will immediately take on the role of executive chair to "to ensure the continued execution of the company's near- and long-term growth strategy during the leadership transition," the company said.
Lululemon CFO Meghan Frank and CCO André Maestrini will be interim co-CEOs after McDonald steps down.
The company's stock spiked in after-hours trading following an earnings beat and the announcement about its CEO, rising about 10%. The company's third-quarter results, posted Thursday, surpassed Wall Street expectations, including a reported revenue of $2.57 billion.
A Jefferies note early Friday morning wrote that McDonald stepping down was Lululemon's "most constructive development for shareholders in years."
"The reality is that under Calvin's leadership, LULU lost its way," the analysts' note wrote. It added that the brand's core identity had been diluted by inconsistent design and expansion into non-core product categories.
"The result: alienation of loyal customers, mounting competitive pressures, and a biz in clear decline," it said.
Representatives for Lululemon did not respond to a request for comment from Business Insider.
