Nike announced on Thursday (September 19) that Elliott Hill has been appointed as the company's new president and CEO.
Elliott Hill will replace John Donahoe, who will retire next month after leading the company through growth and challenges. The leadership change comes as Nike faces several hurdles, including weakened sales and a significant stock decline.
Elliott Hill Returns to Nike
Hill's return marks a comeback to the company he previously retired from in 2020. During his earlier tenure at Nike, Hill held key leadership positions, overseeing consumer and marketplace operations for both Nike and the Jordan brand, according to AP News.
His responsibilities extended across Europe and North America, where he was credited with playing a vital role in growing the business to over $39 billion annually.
Now, with his return, Hill is tasked with steering the company through a rough patch, including an effort to reestablish stability and growth.
Nike's financial performance has been under pressure in recent months. The company reported a 2% revenue decline in its latest fiscal quarter, which ended on May 31, 2024.
This drop follows an overall 24% year-to-date decrease in stock value. Nike's declining sales come amid an increasingly competitive market, with rivals such as Hoka and New Balance capturing more market share, and consumer spending slowing in the United States.
Donahoe, who took over as CEO in 2020, acknowledged the challenges Nike is currently facing. He stated that the company has been addressing these issues head-on while continuing to focus on long-term priorities. Despite the hurdles, he remained optimistic about Nike's future.
Under his leadership, the company began a shift from wholesale distribution to direct sales through its own retail outlets and online platforms. However, this strategy has not been without setbacks.
In the most recent quarter, Nike reported an 8% decrease in direct-to-consumer revenue, even as wholesale revenue saw a modest 5% increase.
In February 2024, Nike announced plans to reduce its global workforce by 2%, which equates to approximately 1,600 jobs. This cost-cutting measure is part of the company's larger three-year strategy to trim expenses and reinvest the savings into high-potential growth areas such as sports, health, and wellness.
The decision to lay off employees is one aspect of the company's effort to navigate a challenging economic environment while positioning itself for future success.
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Nike's Stock Rise Following Elliott Hill's Appointment
Following the announcement of Hill's appointment, Nike's stock rose by nearly 8% in after-hours trading, signaling a positive response from investors. Earlier in the day, Nike shares had closed up slightly at $80.98.
According to the Washington Post, analysts see Hill's return as a move that could help the company regain momentum, given his extensive experience and past successes at Nike.
The sportswear giant has been working to recover from its slowest annual sales growth rate in its 60-year history. The company's revenue for the latest fiscal year came in at $51.4 billion, reflecting a 2% year-over-year decline.
Hill is not the only former Nike executive to be brought back to the company this year. In July, Nike rehired Tom Peddie, a longtime senior executive who also retired in 2020.
Peddie now serves as vice president for marketplace partners and is tasked with improving Nike's relationships with retailers.
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