Nike (NKE) stock soared more than 7% in early trading Friday after the company named a new CEO in an effort to reinvigorate slowing sales growth.
Nike announced Thursday that former Nike executive Elliott Hill, who left the company in 2020, will return to the company as CEO and president on October 14. Nike’s current CEO, John Donahoe, will retire on October 13th and will remain an advisor to the company. The company will last until January 2025.
Prior to his retirement, Hill served as president of Nike’s consumer and marketplace business, leading commercial and marketing operations for Nike and Jordan Brand.
“After implementing a thoughtful succession process that considered our future needs and past business performance, the Board of Directors believes Elliott’s global expertise, leadership style, and deep understanding of our industry and partners are clear. “His passion for sports, our brands, our products, our consumers, athletes and employees, combined with his passion for sports, our consumers, athletes and employees, makes him the right person to lead Nike’s next phase of growth,” said Mark, Nike’s executive chairman. Parker said in a press release.
The news comes as Nike’s stock has languished this year, falling more than 25% amid concerns about slowing revenue growth and the success of its pivot to direct-to-consumer sales.
“This is very good news for the stock, both in terms of the executives named and the timing,” Bernstein senior analyst Aneesha Sherman told Yahoo Finance. “Elliott Hill has worked at Nike for 32 years. He is a product expert. He ran retail businesses in North America (Europe, Middle East, Africa) and the United States. He knows the company and products well. ”
Nike’s Swoosh logo is seen outside a store on Fifth Avenue in New York, New York, USA on March 19, 2019. (Reuters/Carlo Allegri/File Photo) (Reuters/Reuters)
Shares fell 20% in June when the company announced its fourth-quarter results and said it expected next year’s sales to be lower than previously expected. The company said quarterly sales in the fourth quarter were $12.61 billion, down 2% from a year earlier, falling short of Wall Street expectations of $12.86 billion. Meanwhile, Nike’s earnings per share were $0.99, beating analysts’ expectations of $0.66. Nike’s direct-to-consumer sales fell 8% year over year to $5.1 billion.
The Oregon-based company is trying to fend off competition in its core athletic shoe market from rivals like Adidas (ADDYY) and relative upstarts like ONON and DECK’s Hoka brand. Meanwhile, Wall Street has been keeping a close eye on Nike’s product pipeline.
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Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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