Nike said Thursday that former top executive Elliott Hill will rejoin the company to succeed John Donahoe as president and chief executive, as the sportswear giant restructures its top hierarchy amid efforts to revive sales and fight rising competition.
The company's shares rose 9% in after-hours trading.
Hill worked at Nike for 32 years and held senior leadership roles in Europe and North America, and was responsible for helping grow the business to more than $39 billion, the company said.
He previously served as president of Nike's consumer marketing and led all commercial and marketing operations for the Nike and Jordan brands before retiring in 2020.
In a regulatory filing, Nike said Hill's compensation as president and CEO will include an annual base salary of $1.5 million. Hill will take over as CEO on Oct. 14.
Analysts applauded the decision. The CEO change “sends a positive signal because it is someone who knows the brand and knows the company very well,” said Jessica Ramirez of Jane Hali & Associates.
Donahoe was tasked with strengthening Nike's online presence and driving sales through direct-to-consumer channels.
The push initially helped the company tap into post-pandemic demand for sports and leisure apparel, resulting in Nike reaching more than $50 billion in annual sales in fiscal 2023 for the first time.
However, sales have since come under pressure and growth has slowed, with LSEG expecting Nike to report annual sales of $48.87 billion for fiscal 2025 as inflation-weary customers cut back on discretionary spending and the China market recovers more slowly than expected.
A lack of innovative and appealing products has also hurt demand for Nike, as rival brands including Roger Federer-backed On and Deckers' Hoka lure customers with products seen as more modern and trendy.
Expectations of a shake-up at the top intensified after billionaire investor William Ackman disclosed a stake in Nike. His firm, Pershing Square Capital Management, has continued to buy and now owns 16.3 million Nike shares, a person familiar with the position said. Ackman was not immediately available for comment.
A person familiar with Ackman's thinking said Hill would have been his first choice to replace Donahoe. Ackman, who announced his involvement with Nike in a public filing, had not been in contact with the company.
Hill’s experience as a former steward of Nike’s valuable Jordan brand, a major profit driver for the company, could also help the sportswear giant regain some momentum. The value of some Jordan sneakers in 2023 had been falling on the resale market, while other sneaker brands, including On Running, saw meteoric growth.
In recent years, Nike had been scaling back its partnerships with retailers and pushing ahead with plans to boost sales through its own stores and websites. Those sales failed to materialize, putting the company on a $2 billion cost-saving path.
As part of the plan, Nike has cut jobs, reduced supplies of classic sneakers like the Air Force 1 and sought to improve its supply chain to boost margins.
“It clearly seems like Nike wanted to bring back someone with a lot of experience” and “a deep understanding of Nike and its issues, as opposed to John Donahoe, who came in with no industry experience,” said David Swartz, a senior analyst at Morningstar Research.
Hill will have to “work to repair some of Nike’s relationships” with retail partners who buy Nike shoes in bulk, Swartz added. “Nike has lost some customers over the years and has recalled some products and that has created some ill will toward Nike” among sneaker and footwear retailers, he said.
Thomas Hayes, president of Great Hill Capital, called Hill a “great choice.” Nike now needs to “innovate and repair relationships with wholesalers,” he added.
Nike's $11 billion surge in stock value in extended trading following the late announcement suggests how much investors value Hill.
By comparison, Starbucks' value rose by $21 billion in one day after the coffee seller announced on Aug. 13 that it had hired Chipotle Mexican Grill CEO Brian Niccol. Chipotle's value fell by nearly $6 billion that same day.
