Nike (NKE) shares rose more than 7% in early trading Friday after the company named a new chief executive amid its efforts to revive slowing sales growth.
Nike said Thursday that 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 retiring, Hill was president of Nike's consumer and marketing business, leading marketing and business operations for Nike and the Jordan brand.
“Taking into account our needs for the future, the past performance of the business and after conducting a thoughtful succession process, the Board concluded that it was clear that Elliott’s global experience, leadership style and deep understanding of our industry and partners, coupled 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,” said Nike Chief Executive Mark Parker. he said in a press release.
The news comes as Nike's shares have tumbled 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.
“It's very good news for the stock, both because of the executive named and the timing,” Bernstein senior analyst Aneesha Sherman told Yahoo Finance. “Elliott Hill has been with Nike for 32 years. He's a product guy. He's run retail in (Europe, Middle East, Africa) and in the U.S., in North America. He knows the company and the product very well.”
Shares fell 20% in June when the company announced its 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 a year earlier to $12.61 billion, below Wall Street estimates of $12.86 billion. Meanwhile, Nike’s earnings per share of $0.99 beat analysts’ expectations of $0.66. Nike’s direct-to-consumer sales declined 8% from the same quarter a year earlier to $5.1 billion.
Wall Street has been closely watching Nike's product lineup as the Oregon-based company works to fend off competition in its core market of athletic footwear 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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