Nike Inc. (NKE) announced a new chief executive on Thursday, sending its shares up about 10% in after-hours trading 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 effective Oct. 13 and remain an advisor to the company through January 2025.
Prior to his retirement, Hill was President of Nike’s Consumer and Marketplace Division, where he led the commercial and marketing operations for Nike and the Jordan Brand.
“Given our future needs, the company’s past performance, and after a thoughtful succession process, the Board has concluded that it is clear that Elliott’s global experience, leadership style, and deep understanding of our industry and our partners, coupled with his passion for sport, our brands, our products, our consumers, our athletes, and our employees, make him the right person to lead Nike’s next phase of growth,” Nike CEO Mark Parker said. He said in a press statement.
The news comes as Nike shares have stumbled this year, falling more than 25% amid slowing revenue growth and concerns about the success of the company’s shift to direct-to-consumer sales.
“This is very good news for the stock, both in terms of the CEO who was appointed and the timing,” Bernstein principal analyst Anisha Sherman told Yahoo Finance. “Elliot Hill has been at Nike for 32 years. He’s a product guy. He’s run retail in Europe, the Middle East and Africa and the 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 expected revenue to fall more than it previously thought next year. The company said fourth-quarter revenue fell 2% from a year earlier to $12.61 billion, missing Wall Street estimates of $12.86 billion. At the same time, Nike’s earnings of $0.99 per share beat analysts’ expectations of $0.66. Nike’s direct-to-consumer sales fell 8% from the same quarter a year ago to $5.1 billion.
Wall Street has been closely watching Nike’s product line as the Oregon-based company works to fend off competition in the core athletic footwear market from rivals like Adidas (ADDYY) and relative upstarts like On (ONON) and Decker’s (DECK) Hoka brand.
Josh Schaffer is a reporter at Yahoo Finance. You can follow him on X @_Joshshafer.
Click here for an in-depth analysis of the latest stock market news and events that move stock prices.
Read the latest financial and business news from Yahoo Finance.