Nike (NKE) shares rose more than 7% in early trading Friday after the company named a new CEO amid efforts to revive slowing sales growth.
Nike announced 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 will remain an advisor to the company through January 2025.
Prior to his retirement, Hill served as president of Nike’s consumer and marketplace business, leading the retail and marketing efforts of Nike and the Jordan brand.
“Given our future needs, past business performance and after conducting a thoughtful succession process, the Board concluded that Elliott’s global expertise, 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 phase of growth,” said Mark Parker, Nike’s chief executive officer, in a press release.
The news comes as Nike’s share price has stumbled this year, falling more than 25 percent due to slowing sales 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 manager’s appointment and the timing,” Bernstein chief 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, the Middle East, Africa) and the U.S. in North America. He knows the company and the product very well.”
The stock fell 20% in June when the company reported fourth-quarter results and said it expected a sharper decline in sales next year than originally estimated. The company said fourth-quarter quarterly sales 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 fell 8% from the year-ago quarter to $5.1 billion.
Wall Street is closely watching Nike’s product pipeline as the Oregon-based company tries to fend off competition in its core athletic footwear market from rivals such as Adidas (ADDYY) and relative upstarts such as On (ONON) and Decker’s (DECK) brand Hoka.
Josh Schafer is a reporter at Yahoo Finance. Follow him on X @_joshschafer.
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