Lululemon Surges as CEO Exit Offers Shot at Strategic Reset (1)

Lululemon Athletica Inc. shares rallied after the pricey yoga-wear maker boosted its full-year outlook and announced that its chief executive officer would step down after a period of sluggish growth.

The company is searching for a replacement for CEO Calvin McDonald, who will depart the top post at the end of January.

Calvin McDonald

Photographer: Darryl Dyck/The Canadian Press/AP Photo

The shares gained as much as 14% in Friday trading. The stock had declined more than 50% this year through Thursday’s close.

The decision to find new leadership is “overdue” and possibly “the most constructive development for shareholders in years,” Jefferies analyst Randal Konik wrote in ...