Nike’s stock surged over 7% in early Friday trading following the announcement of a new CEO, a move aimed at revitalizing its declining sales growth. The company revealed that Elliott Hill, a former executive who retired in 2020, will rejoin Nike as CEO and president starting October 14. Current CEO John Donahoe will retire on October 13 but will continue to serve as an adviser until January 2025.
Hill previously held the position of president of Nike’s consumer and marketplace division, overseeing commercial and marketing strategies for both Nike and the Jordan brand. Nike’s executive chairman Mark Parker expressed confidence in Hill’s qualifications, highlighting his extensive global experience and deep understanding of the industry as key factors for leading the company into its next growth phase.
This leadership change comes in the wake of a challenging year for Nike, which has seen its stock drop more than 25% amid sluggish revenue growth and questions surrounding its shift to direct-to-consumer sales. Bernstein senior analyst Aneesha Sherman remarked on the positive impact of this news for the stock, praising Hill’s 32 years at Nike and his product-focused background.
Nike’s stock suffered a significant 20% decline in June after the company reported a decrease in fiscal fourth-quarter earnings and lowered its revenue forecasts for the upcoming year. The fourth-quarter revenue fell 2% year-over-year to $12.61 billion, missing Wall Street predictions, although its earnings per share of $0.99 surpassed estimates. Additionally, direct-to-consumer sales were down 8% from the previous year.
As Nike navigates a competitive landscape, it continues to monitor its product pipeline closely, particularly in response to competition from other major brands like Adidas and emerging companies such as On and Hoka.