Lululemon CEO resigns, conduct "fell short"

Lululemon (LULU)  announced CEO Laurent Potdevin resigned on Monday after the athletic-wear company said he didn't meet its standards of conduct.

The company said in a statement that it "expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct."

Potdevin, has been CEO of Lululemon in 2014.

Glenn Murphy, chairman of the board, said it's "the responsibility of leaders to set the right tone," and protecting the organization's culture is one of the board's most important duties.

Lululemon said it has begun to search for a successor. The company has been on a rebound as it upgrades its fabrics while pushing online sales and men's clothing.

Shares in Lululemon fell more than 3 percent, or $2.33, to $75.08 after-hours trading following the announcement. The had closed down 1.5 percent in regular trading.