Here are four things you need to know this morning
Lululemon CEO steps down: Lululemon Athletica Inc. said Chief Executive Officer Calvin McDonald is stepping down as the pricey yoga-wear brand looks to reignite growth amid pressure from upstart competition and its founder. McDonald will depart the company at the end of January, and the company is searching for a replacement. The chair of the board, Marti Morfitt, will take on an expanded role as executive chair. Meanwhile Lululemon reported net income of US$306.8 million during its third quarter, down from US$351.9 million during the same period last year. It amounted to earnings per diluted share of US$2.59 for the quarter, down from US$2.87 in the prior quarter. The Vancouver-based company, which keeps its books in U.S. dollars, reported its revenue reached US$2.6 billion during the third quarter, up seven per cent from US$2.4 billion last year. The company’s board of directors also approved a US$1 billion increase to its stock repurchase program.
Broadcom shares slide: Broadcom Inc., a chip company vying with Nvidia Corp. for AI computing revenue, slumped after its sales outlook for the red-hot market failed to meet investors’ lofty expectations. The shares fell about five per cent in premarket trading on Friday, following unsettling commentary from Chief Executive Officer Hock Tan on a conference call with analysts. He said the company has a backlog of $73 billion in AI product orders that will be shipped over the next six quarters — a number that disappointed some investors. But Tan sought to clarify that the figure was a “minimum.” The call followed a generally upbeat earnings report on Thursday afternoon. Sales will be about $19.1 billion in the fiscal first quarter, which ends Feb. 1, the company said. Analysts had estimated $18.5 billion on average, according to data compiled by Bloomberg. The company also boosted its quarterly dividend 10 per cent to 65 cents a share.
Trump may push for a Cannabis reclassification: U.S. President Donald Trump is expected to direct his administration to move to reclassify cannabis as a less dangerous drug, according to people familiar with the matter, a move that could represent one of the biggest shifts in US policy toward cannabis in decades. Cannabis is currently labeled a Schedule I drug, putting it in the same category that includes substances like heroin and LSD, categorized as having no medical use and a high potential for abuse. Trump is weighing pushing to reclassify it to a Schedule III drug, according to the people, which would move it to a tier for substances seen as having a lower potential for dependency — on the same level as ketamine, Tylenol with codeine, as well as anabolic steroids. Reclassification would make it easier to buy and sell cannabis, delivering a major victory for companies and investors in the sector as well as patients who use medical marijuana.
Prime Minister wants CUSMA: Prime Minister Mark Carney pushed back Thursday against the suggestion the U.S. is considering pulling out of North America’s free-trade pact. When The Canadian Press asked the prime minister if he was open to separate bilateral trade pacts if the U.S. withdraws, Carney replied, “That’s not what they’re saying.” U.S. Trade Representative Jamieson Greer floated the idea during a public talk put on by the American think-tank the Atlantic Council in Washington on Wednesday. Greer said the continental free-trade pact could be dissolved, revised, or renegotiated. “Could it be exited? Yeah, it could be exited. Could it be revised? Yes. Could it be renegotiated? Yes,” he said. “All of those things are on the table.” Canada’s most important free trade deal, the Canada-United States-Mexico Agreement — often referred to as CUSMA — is set to come up for review next year.
