Lululemon names a COO and product chief in Heidi O'Neill's first reset

A month into her tenure, Lululemon chief executive Heidi O'Neill has made her first move, announcing a new chief operating officer and a new chief product officer on Wednesday. Both roles are newly created at the company, which makes athletic apparel.

The product job goes to Maggie Gauger, currently chief executive of Athleta, who will oversee design, merchandising and product innovation. Her two decades before Athleta were spent at Nike, where her time overlapped with O'Neill. Lululemon has not named the new operating chief.

Analysts split on the picks

Reaction from analysts was mixed. William Blair's Sharon Zackfia and Dylan Carden pointed out that Gauger has had little tangible success at Athleta over the past year, which makes her the most scrutinised name in the new lineup.

GlobalData managing director Neil Saunders took a measured view. Having people from Nike and Athleta at the top made sense on paper because they are experienced, he said, but both brands' performance has been far from stunning.

There is a great deal to prove in how the new team will deliver, Saunders told Retail Dive. Jefferies analysts, led by Randal Konik, said in emailed comments that one product leader at president level brings the clear accountability needed to build a stronger pipeline of differentiated product.

Jefferies added that a new chief operating officer should add operating discipline. O'Neill herself said Lululemon has work to do to become a stronger, more competitive company, and the analysts agreed. Still, they wrote, the path is long.

O'Neill framed the restructure as putting product, design and innovation at the centre of how the company operates. In her statement she said the goal is focus and accountability to create a stronger pipeline of differentiated product, in stores and online.

What the refresh leaves out

The change on the product side is welcome but not complete. William Blair noted that Lululemon has not replaced its global creative director, a role Jonathan Cheung took on in 2024. Trends have worsened since his full assortment arrived this spring, the analysts said.

They said they were surprised the creative director post went untouched given deteriorating trends. Constant-dollar comparable sales fell 10% in the July quarter, which they called the worst on record for the company.

Searches are still open for a communications chief and a technology chief, both of whom will join the senior leadership team, and for a chief strategy officer who will report to finance chief Meghan Frank. Jefferies also noted that no chief brand officer has been hired.

The product reset follows a rough year. Customer response to new products remains inconsistent, Frank said last month, and Lululemon has regularly missed the mark with shoppers over the past year.

In its most recent quarter, revenue in the Americas fell 8% while comparable sales there were down 12%. William Blair said visibility is limited on when the region returns to growth, that China is beginning to fracture, and that competition is tougher.

We covered the scale of the decline when Lululemon's leggings sales fell 20% and guidance was cut twice, with O'Neill arriving before any 2027 plan existed. This reshuffle is the first structural answer to that pressure.

Jefferies also cautioned that it will take several seasons for new product leadership to affect the assortment on shelves, so any visible change in the product is unlikely to come quickly.

What analysts want next

It is always good to have a fresh set of eyes in a turnaround, BCE Consulting senior adviser Matt Powell said. Analysts largely agree the appointments alone are not enough, and that O'Neill now needs to set out her strategy.

A reshuffle at the top is sensible because Lululemon needs fresh thinking and a new sense of direction, Saunders said. It also makes clear that for O'Neill it will not be a case of business as usual.

Alongside the appointments, Saunders said, more is needed on strategy. He accepted that could come over time, but argued the new direction must be communicated.

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Image: Lululemon