US-based Elliott Management has built a stake exceeding $1bn in Canadian retailer Lululemon Athletica.

Reuters reports that the activist investor is preparing to push to change the company’s CEO.

The hedge fund has been working for months with retail executive Jane Nielsen, former chief financial officer and chief operating officer of Ralph Lauren.

Elliott Management views her as a potential contender for Lululemon’s CEO role.

With its latest investment, Elliott has become one of the Canadian athleticwear retailer’s largest shareholders.

The position adds to a string of recent moves by the company, which has taken a stake in PepsiCo and engaged in a proxy battle at Phillips 66 during 2025.

Neither Elliott and Lululemon provided a comment to Reuters.

Lululemon announced in early December 2024 that CEO Calvin McDonald will leave his post in January 2026 after seven years, but did not identify his successor.  

The athleticwear maker is currently valued at around $25bn.

The absence of a named successor, combined with Elliott’s involvement, raises the prospect of an extended and potentially expensive contest over the future leadership of the company.

Lululemon’s founder and largest shareholder, Chip Wilson, has called for a rapid overhaul of the board’s approach to the CEO search.

In Q3 of fiscal 2025, which ended on 2 November 2025, Lululemon reported net revenue of $2.6bn, a 7% increase compared with the same quarter a year earlier.

Regional performance was uneven, with net revenue in the Americas falling 2%, while international markets delivered 33% growth.  

Gross profit edged up 2% to $1.4bn, though gross margin contracted by 290 basis points to 55.6%.  

Operating income declined 11% to $435.9m, reducing operating margin to 17%, down 350 basis points.