Nike on Thursday announced former senior executive Elliott Hill will rejoin the company to succeed John Donahoe as new president and CEO. CEO John Donahoe is stepping down and company veteran Elliott Hill is coming out of retirement to take the helm of the sneaker giant, Nike. Nike said on Thursday that as the sportswear giant leadership transition is owing to the efforts to revive sales and battle rising competition.
John Donahoe, who has been Nike’s CEO since Jan. 2020, will retire from his position on October 13. Elliot Hill is slated to take over as the new CEO of Nike the following day. Donahoe will stay on as an advisor through the end of January.
Nike’s new CEO, Elliott Hill
Nike has always been a core part of who I am, and I’m ready to help lead it to an even brighter future,” Hill said in a statement.
Elliot Hill was at Nike for 32 years and held senior leadership positions across Europe and North America where he helped expand the business to more than $39 billion, the company said.
He was previously Nike’s president, consumer marketplace, leading all commercial and market operations for the Nike and Jordan brands before retiring in 2020.
Nike said in a regulatory filing that Hill’s compensation as president and CEO will include an annual base salary of $1.5 million. He will take over as the new CEO on October 14.
Restructuring at Nike
Nike is in the midst of a broader restructuring after it shifted its strategy to sell directly to consumers. Critics say in the process of building out sales at Nike’s own stores and website, it lost sight of innovation and failed to churn out the types of groundbreaking sneakers the company was known for.
In December, Nike announced a broad restructuring plan to reduce costs by about $2 billion over the next three years. It later said it would shed 2% of its workforce, or more than 1,500 jobs, so it could invest in its growth areas, such as running, the women’s category and the Jordan brand.
Nike sales
In late June when it reported fiscal Q4 results, Nike warned that it was expected sales to drop 10% during its current quarter, citing soft demand in China and “uneven” consumer trends across the globe.
The outlook was far worse than the 3.2% decline that analysts had expected.
As Nike goes through its current rough patch, it’s trying to get back to the fundamentals that had long defined the business and made it the market leader in sneakers and athletic apparel. In contrast to Nike’s previous leaders, Donahoe was not a retailer and he’d previously helmed companies like eBay and the consulting firm Bain & Company. He was appointed in part for his digital chops so he could help lead Nike through its direct selling strategy, which involved building out robust e-commerce operations and data gathering efforts.
Under Donahoe’s tenure, Nike grew annual sales from $39.1 billion in fiscal 2019 to $51.4 billion in fiscal 2024. During Covid, online sales were booming and the strategy to transform Nike from a brand into a retailer seemed to be working — until the pandemic started to end. As Nike worked to cut off its wholesale partners, it paved the way for a slew of upstart competitors such as On Running and Hoka to take over that crucial shelf space and take market share.
CEO changes positive for Nike
Jessica Ramirez, senior research analyst at Jane Hali & Associates, said Hill’s appointment is a positive for Nike because of his deep understanding of the company’s culture, which she said is struggling from a morale slump.
“He is up against a tough environment in terms of morale at the company, rebuilding some of that culture that the company has lost,” said Ramirez. “He does have quite some work to do across various teams but I think that’s what needs to be the focus, its culture and therefore, enabling the ability to have better products and newness.”
Thomas Hayes, chairman at Great Hill Capital, called Hill a “great pick.” Nike now needs to “innovate and repair relationships with wholesalers,” he added. Great Hill Capital does not hold shares in Nike.
In a statement, Donahoe said it “became clear that now was the time to make a leadership change.”
“Elliott is the right person. I look forward to seeing Nike and Elliott’s future successes,” he said.
Nike stock
Nike shares climbed 8% in extended trading on Thursday at a price of $87.10. As of the close, Nike stock was down more than 25% this year.
