Nike’s stock surged over 7% in early trading on Friday following the announcement of a new CEO as the company seeks to boost its sluggish sales growth.
On Thursday, Nike revealed that Elliott Hill, a former executive who retired in 2020, would return as CEO and president starting October 14. Current CEO John Donahoe is set to retire on October 13 but will continue to serve as an advisor until January 2025.
Hill previously held the position of president of Nike’s consumer and marketplace business, managing commercial and marketing strategies for both Nike and the Jordan brand.
Nike’s executive chairman Mark Parker stated in a press release that after a thorough succession process, the board recognized Hill’s extensive global experience and understanding of the industry, which makes him the ideal candidate to spearhead Nike’s next growth phase.
This leadership shift comes at a challenging time for Nike, as its stock has dropped over 25% this year due to concerns over revenue growth and the effectiveness of its direct-to-consumer sales strategy.
Bernstein senior analyst Aneesha Sherman commented that Hill’s lengthy tenure at Nike—spanning 32 years—coupled with his deep knowledge of the products and the market, positions him well for this role.
Nike’s stock faced a significant decline earlier this year after disappointing fiscal fourth-quarter results, with a reported revenue of $12.61 billion, falling short of Wall Street expectations. While earnings per share exceeded predictions, direct-to-consumer sales saw an 8% drop compared to the same period last year.
Market analysts are closely monitoring Nike’s product pipeline as the company competes with major rivals such as Adidas and newer brands like On and Hoka.