Nike (NKE) named a new CEO Thursday, sending its stock up nearly 10% in after hours trading as the company attempts to reinvigorate slowing sales growth amid increased competition.
Elliott Hill, a former Nike executive who retired in 2020, will return to the company as the CEO and president on Oct. 14. John Donahoe, Nike’s current CEO, will retire effective Oct. 13 and will remain an advisor to the company until January 2025.
Before retiring, Hill was president of Nike’s consumer and marketplace business, leading commercial and marketing operations for Nike and the Jordan brand.
“Given our needs for the future, the past performance of the business, and after conducting a thoughtful succession process, the Board concluded it was clear Elliott’s global expertise, leadership style, and deep understanding of our industry and partners, paired with his passion for sport, our brands, products, consumers, athletes, and employees, make him the right person to lead Nike’s next stage of growth,” Nike Executive Chairman Mark Parker said in a press release.
The news comes as Nike stock has stumbled this year, falling more than 25% amid slowing revenue growth and concerns about the success of the company’s pivot to direct-to-consumer sales.
“This is very good news for the stock, both the executive named, as well as the timing,” Bernstein senior analyst Aneesha Sherman told Yahoo Finance. “Elliott Hill has worked at Nike for 32 years. He’s a product guy. He’s ran retail 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 decline more than it previously thought in the coming year. The company said quarterly revenue in the fourth quarter fell 2% from the year prior to $12.61 billion, below Wall Street’s estimates for $12.86 billion. Meanwhile, Nike’s $0.99 earnings per share exceeded analysts’ expectations of $0.66. Nike’s direct-to-consumer sales declined 8% from the same quarter a year ago to $5.1 billion.
Wall Street has been closely watching Nike’s product pipeline as the Oregon-based company works to fend off competition in its core athletic footwear market from rivals like Adidas (ADDYY) and relative upstarts 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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