Lululemon Athletica shares in the United States have tumbled to their lowest level since March 2020 as the struggling athletic apparel maker's decision to tap a CEO from turnaround-embattled Nike failed to reassure investors.

The appointment of Heidi O'Neill, who most recently was the president of consumer, product, and brand at Nike, ends a months-long search marked by pressure from an activist investor and Lululemon's founder Chip Wilson.

"We do not expect the market to receive this appointment positively given O'Neill's longstanding tenure at Nike, which overlaps with the brand developing many challenges that parallel the ones LULU is currently facing," BTIG analyst Janine Stichter said.

Lululemon shares fell about 12 per cent in early trading on Thursday.

O'Neill, who left Nike last year after more than 25 years amid a management reshuffle, will join in September and will be tasked with stalling Lululemon's market share losses and refreshing its image.

Nike's stock hit a more than decade-low earlier this month after CEO Elliott Hill warned of a sharp sales drop and continued weakness in China, frustrating analysts and investors keen on a revival in the storied sportswear giant's fortunes.

Lululemon has also dealt with product recalls for some of its pricey leggings in the recent past and has tried to balance inventory levels as it deals with intensifying competition from upstart brands such as Alo Yoga and Vuori in the US.

Chip Wilson, who owns about 4.3 per cent of the company, continues to believe that a board overhaul should have come before the CEO's election, a source familiar with the founder's thinking told Reuters.

Wilson has been waging a proxy fight to install his three director-candidates and had said earlier this year that any CEO candidate picked by the current board would have his support.

Elliott did not respond to Reuters request for comment.