Nike (NKE) announced the appointment of Elliott Hill as its new CEO on Thursday, resulting in a nearly 10% increase in after-hours trading. This leadership change comes as the company seeks to revitalize its slowing sales growth in the face of heightened competition.
Hill, a former executive who retired in 2020, will step into the role on October 14, replacing current CEO John Donahoe, who will retire on October 13 but remain as an adviser until January 2025. Prior to his retirement, Hill served as president of Nike’s consumer and marketplace division, overseeing commercial and marketing operations for both Nike and the Jordan brand.
Mark Parker, Nike’s executive chairman, praised Hill’s qualifications, stating, “Given our future needs, past business performance, and a thorough succession process, it was clear that Elliott’s global expertise, leadership style, and deep industry understanding make him the ideal choice to lead Nike’s next growth phase.”
This news comes as Nike’s stock has struggled, declining over 25% this year amid concerns about revenue growth and challenges related to its shift towards direct-to-consumer sales.
Bernstein senior analyst Aneesha Sherman commented positively on the appointment, stating, “This is very good news for the stock, both in terms of the executive named and the timing. Elliott Hill has 32 years of experience at Nike and is well-versed in the company’s products and operations across various regions.”
Nike’s stock suffered a 20% drop in June after the company reported disappointing fiscal fourth-quarter earnings, forecasting a steeper revenue decline than previously anticipated. Quarterly revenue for that period fell 2% year-over-year to $12.61 billion, missing Wall Street’s estimates of $12.86 billion. However, Nike reported earnings per share of $0.99, surpassing analysts’ expectations of $0.66. Notably, direct-to-consumer sales decreased by 8% from the prior year, totaling $5.1 billion.
As Nike navigates challenges in its core athletic footwear market, it faces increasing competition from established players like Adidas (ADDYY) and emerging brands such as On (ONON) and Deckers’ (DECK) Hoka brand. Wall Street is closely monitoring Nike’s product pipeline as the company adapts to these competitive pressures.
