Nike (NKE) named a new CEO on Thursday, sending its stock up nearly 10% after hours as the company tries to revive sluggish sales growth amid increased competition.
Elliott Hill, a former Nike executive who retired in 2020, will return to the company as CEO and president on Oct. 14. John Donahoe, Nike’s current CEO, will retire on Oct. 13 and will remain an advisor to the company through January 2025.
Before retiring, Hill was president of Nike’s consumer and marketplace division, where he led commercial and marketing activities for Nike and the Jordan brand.
“Given our needs for the future, the company’s past performance and after conducting a thoughtful succession process, the Board concluded that it was clear that Elliott’s global expertise, leadership style and deep understanding of our industry and partners, combined with his passion for sport, our brands, products, consumers, athletes and employees, make him the right person to lead Nike’s next phase of growth,” Nike Executive Chairman Mark Parker said in a press release.
The news comes after Nike shares have fallen more than 25% this year amid slowing sales growth and concerns about the success of the company’s move to direct-to-consumer sales.
“This is very good news for the stock, both for the executive mentioned and for the timing,” Bernstein senior analyst Aneesha Sherman told Yahoo Finance. “Elliott Hill has been with Nike for 32 years. He’s a product guy. He’s run the retail business in [Europe, Middle East, Africa] and US in North America. He knows the company and the product very well.”
The stock fell 20% in June when the company reported fiscal fourth-quarter earnings and said it expects revenue to fall more than it previously thought in the coming year. The company said fourth-quarter revenue fell 2% from a year earlier to $12.61 billion, below Wall Street estimates of $12.86 billion. Meanwhile, Nike’s earnings per share of $0.99 topped analysts’ expectations of $0.66. Nike’s direct-to-consumer sales fell 8% from the year-ago quarter to $5.1 billion.
Wall Street is keeping a close eye on Nike’s product pipeline as the Oregon company tries to fend off competition in its key athletic footwear market from rivals like Adidas (ADDYY) and relative newcomers like On (ONON) and Deckers’ (DECK) Hoka brand.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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