Why Did Lululemon Shares Jump in Premarket? Q3 Beat, Buyback Boost, CEO Transition

Lululemon athletica inc. (NASDAQ: LULU) stock surged approximately 10% in premarket trading on Friday, December 12, 2025, reaching $207.01 at 9:00:58 AM EST, up from its previous close of $187.62. The dramatic jump followed the athletic apparel retailer’s announcement of better-than-expected fiscal Q3 2025 results, a $1 billion expansion of its share repurchase program, and a CEO succession plan.

The combination of these three major catalysts provided investors with renewed confidence despite ongoing challenges in the North American market.

Lululemon Beats Q3 EPS Estimates as Revenue Reaches $2.6 Billion

Lululemon delivered fiscal Q3 2025 results that exceeded Wall Street forecasts, with diluted earnings per share of $2.59 compared to the $2.21 estimate, a beat of $0.38. Net revenue grew 7% year-over-year to $2.6 billion, though the company faced regional challenges with Americas revenue declining 2% while international revenue surged 33%. Comparable sales increased 1% overall, with Americas comps down 5% offset by robust 18% growth in international markets.

The quarter revealed margin pressures, with gross margin declining 290 basis points to 55.6% and operating margin down 350 basis points to 17.0%. Despite these headwinds, income from operations reached $435.9 million, and net income totaled $306.8 million.

The company ended the quarter with 796 stores after adding 12 net new company-operated locations, demonstrating continued physical expansion alongside its digital growth strategy.

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Leadership Transition and Capital Return Program

Bank of America Securities responded to the earnings report by raising its price target on Lululemon from $185 to $220, representing a 19% increase that reflects growing analyst confidence in the company’s future performance.

The upgrade came as CEO Calvin McDonald announced he will step down effective January 31, 2026, with board chair Marti Morfitt becoming executive chair immediately. CFO Meghan Frank and Chief Commercial Officer André Maestrini will serve as interim co-CEOs while the board conducts a comprehensive search for a permanent successor.

The board simultaneously approved a $1.0 billion increase to the stock repurchase authorization, bringing total remaining authorization to approximately $1.6 billion as of December 11, 2025. This capital return program signals management’s confidence in the company’s cash generation capabilities and long-term prospects.

The leadership transition is positioned as an orderly succession, with McDonald remaining involved through March 31, 2026, as a senior advisor to ensure business continuity during the search process.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.