Nike announced on Thursday that Elliott Hill, a former senior executive with 32 years at the company, will return as president and CEO, succeeding John Donahoe. Hill’s appointment comes as the sportswear giant grapples with declining sales and heightened competition, with the aim of revitalizing its growth trajectory. Following the announcement, Nike’s shares surged 8% in after-hours trading.
Hill, who retired from Nike in 2020, previously served as president of consumer marketplace, overseeing commercial operations for both Nike and its Jordan brand. His leadership was crucial in driving Nike’s annual sales beyond $39 billion. He will officially assume the CEO role on October 14, with a base salary of $1.5 million.
Industry analysts have lauded the decision, with Jessica Ramirez from Jane Hali & Associates noting that Hill’s extensive knowledge of the company signals a positive direction for investors. “It’s someone who knows the brand and the company very well,” she commented.
Donahoe, who guided Nike through the pandemic, initially achieved success by expanding the direct-to-consumer strategy and enhancing the company’s digital presence. Under his leadership, Nike exceeded $50 billion in annual sales in fiscal 2023. However, the company is now facing challenges, with forecasts for fiscal 2025 projecting a drop to $48.84 billion. Factors such as sluggish consumer demand, inflation, and a slower-than-expected recovery in the Chinese market have contributed to this decline.
Nike is also contending with increasing competition from emerging brands like Roger Federer-backed On and Deckers’ Hoka, which are appealing to younger consumers seeking trendy footwear. The absence of innovative new products from Nike has further eroded its market share.
Anticipation for a leadership change had been building following billionaire investor William Ackman’s significant stake in the company through his hedge fund, Pershing Square Capital Management. While Ackman has not publicly commented on his intentions, sources indicate that Hill was his preferred candidate for CEO.
Hill’s vast experience managing Nike’s Jordan brand and strong relationships with retailers could be vital in helping the company regain momentum. David Swartz, senior analyst at Morningstar, highlighted that Hill’s understanding of Nike’s core challenges distinguishes him from Donahoe, who lacked a background in sportswear. Swartz noted, “Hill will need to work on repairing relationships with retail partners and drive product innovation,” referring to the fallout from Nike’s emphasis on direct sales.
Thomas Hayes, chairman of Great Hill Capital, praised Hill as a “great pick” for Nike’s leadership, emphasizing the need for innovation and rebuilding connections with wholesalers to regain competitiveness.
Hill’s career at Nike began in a sales role, starting as an assistant in a Memphis showroom before advancing through the ranks. His return is viewed as a strategic move to navigate the challenges posed by evolving market dynamics and fierce competition.
Nike’s stock value increased by $11 billion in after-hours trading, reflecting investor optimism regarding the leadership transition. Hill’s appointment represents a crucial moment for the brand as it strives to revive its performance and reassert its position in the global sportswear market.
