Nike’s stock surged over 7% in early trading on Friday following the announcement of a new CEO, a strategic move aimed at revitalizing its slowing sales growth.
The company revealed on Thursday that Elliott Hill, a former executive who retired in 2020, will take over as CEO and president starting October 14. Current CEO John Donahoe will step down effective October 13 but will continue to serve as an advisor until January 2025.
Before his retirement, Hill held the position of president of Nike’s consumer and marketplace business, where he oversaw commercial and marketing operations for Nike and the Jordan brand.
Nike’s executive chairman Mark Parker expressed confidence in Hill’s return, highlighting his extensive industry experience and leadership qualities as key factors that will contribute to Nike’s future growth.
This leadership change arrives amid a challenging year for Nike, with the stock plummeting more than 25% due to fading revenue growth and worries about the effectiveness of its shift toward direct-to-consumer sales.
Bernstein senior analyst Aneesha Sherman commented positively on the leadership appointment, noting Hill’s comprehensive experience at Nike over 32 years and his deep understanding of the company’s products.
In June, Nike’s stock took a hit after the company posted disappointing fiscal fourth-quarter earnings and projected a sharper decline in revenue than anticipated. The quarterly revenue fell 2% from the previous year to $12.61 billion, below Wall Street’s expectations. Although earnings per share of $0.99 surpassed analysts’ estimates of $0.66, direct-to-consumer sales experienced an 8% drop to $5.1 billion.
The market is closely monitoring Nike’s upcoming product releases as the Oregon-based giant faces competition in the athletic footwear sector from companies like Adidas as well as newer brands such as On and Deckers’ Hoka line.