Nike’s stock jumped over 7% in early trading on Friday following the announcement of a new CEO in a bid to revitalize slowing sales growth. The company revealed on Thursday that Elliott Hill, a former executive who retired in 2020, will return as CEO and president starting October 14. This transition comes as current CEO John Donahoe is set to 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, where he managed commercial and marketing operations for both Nike and the Jordan brand. Nike’s executive chairman, Mark Parker, expressed confidence in Hill’s leadership, stating that his global expertise and passion for the sports industry makes him well-suited to guide the company through its next growth phase.
This leadership change comes at a crucial time, as Nike’s stock has plummeted more than 25% this year due to slowing revenue growth and worries regarding the effectiveness of its direct-to-consumer sales strategy. Bernstein senior analyst Aneesha Sherman noted that Hill’s extensive 32 years of experience with Nike and his strong product knowledge is promising for the company’s future.
In June, the company’s stock fell 20% after reporting disappointing fiscal fourth-quarter earnings, which indicated an expected revenue decline that was greater than initially anticipated. Quarterly revenue decreased by 2% year-over-year to $12.61 billion, falling short of Wall Street estimates of $12.86 billion. Although Nike’s earnings per share of $0.99 surpassed expectations of $0.66, direct-to-consumer sales saw an 8% drop compared to the same period the previous year, totaling $5.1 billion.
Investors are keenly monitoring Nike’s product pipeline as the company strives to maintain its competitive edge in the athletic footwear sector against rivals such as Adidas and emerging brands like On and Hoka.