Nike (NKE) shares surged more than 7% at the start of trading on Friday after the company appointed a new CEO as part of an effort to reinvigorate slowing sales growth.
Nike announced Thursday that Elliot Hill, a former Nike executive who left in 2020, will return to the company as CEO and president on Oct. 14. Nike’s current CEO, John Donahoe, will retire on Oct. 13 and remain as an adviser to the company until January 2025.
Prior to his retirement, Hill served as president of Nike’s Consumer and Marketplace business, where he led commercial and marketing operations for the Nike and Jordan brands.
“After considering our future needs, our performance to date and a thoughtful succession selection process, the board concluded that Elliott’s global expertise, leadership style, deep understanding of the industry and our partners, and passion for sport, our brands, products, consumers, athletes and employees clearly make him the right person to lead Nike through its next phase of growth,” Nike Chairman Mark Parker said in a press release.
The news comes as Nike’s shares have slumped, falling more than 25% this year on slowing revenue growth and concerns about the success of the company’s direct-to-consumer shift.
“This is very good news for the stock, both based on the executive names and the timing,” Bernstein senior analyst Aneesha Sherman told Yahoo Finance. “Elliot Hill has worked at Nike for 32 years. He’s a product guy. [Europe, Middle East, Africa] He is based in the US branch in North America and knows the company and products very well.”
The Nike swoosh logo is seen outside a store on 5th Avenue in New York, New York, United States, March 19, 2019. (REUTERS/Carlo Allegri/File Photo) (REUTERS/Reuters)
Nike’s shares fell 20% in June after the company reported fourth-quarter earnings and said it expected revenues next year to be lower than previously expected. The company said fourth-quarter revenues fell 2% from a year ago to $12.61 billion, below Wall Street’s expectations of $12.86 billion. Nike’s earnings per share were $0.99, beating analysts’ expectations of $0.66. Nike’s direct-to-consumer sales fell 8% from a year ago to $5.1 billion.
Wall Street is closely watching Nike’s product pipeline as the Oregon-based company strives to fend off competition in its core athletic footwear market from rivals like Adidas (ADDYY) and relative upstarts like On (ONON) and Deckers’ (DECK) Hoka brand.
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Josh Shaffer is a reporter for Yahoo Finance. Follow him on X Follow.
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