Nike's Hill to return as CEO, Donahoe to retire; shares rise
Corrects time frame and amount in paragraph 9 to "Nike's annual sales are expected to fall to $48.84 billion for fiscal 2025" instead of "Nike's annual sales fell to $48.87 billion for fiscal 2025."
Hill's background includes 32 years at Nike, leading commercial and market operations
Donahoe's tenure included initial growth but recent sales pressure
Shares rise 8% in after-hours trading
Analysts and investors cheer return of Hill, expecting improved performance
By Juveria Tabassum, Nicholas P. Brown
Sept 19 (Reuters) -Nike NKE.N said on Thursday that former senior executive Elliott Hill will rejoin the company to succeed John Donahoe as president and CEO, as the sportswear giant shakes up its top rank amid efforts to revive sales and battle rising competition.
The company's shares rose 8% in after-hours trading.
Hill was at Nike for 32 years and held senior leadership positions across Europe and North America and was responsible for helping expand the business to more than $39 billion, the company said.
He was previously Nike's president, consumer marketplace, leading all commercial and market operations for the Nike and Jordan brands before retiring in 2020.
Nike said in a regulatory filing that 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 cheered the move. The CEO change "gives a positive signal because it is someone that knows the brand and knows the company very well," said Jessica Ramirez of Jane Hali & Associates.
Donahoe was tasked with bolstering Nike's online presence and driving sales through direct-to-consumer channels.
The push initially helped the company build on the demand for athletic and leisurewear following the pandemic, resulting in Nike touching 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, according to estimates compiled by LSEG. Nike's annual sales are expected to fall to $48.84 billion for fiscal 2025 as inflation-weary customers cut back on discretionary spending and China's market rebounds more slowly than expected.
A lack of innovative and appealing products has also tripped demand for Nike. Rival brands including Roger Federer-backed On ONON.N and Deckers' Hoka DECK.N are attracting shoppers and retail partners with products considered more fashionable and trendy.
Expectations for a change at the top were heightened after billionaire-investor William Ackman disclosed a stake in Nike. His Pershing Square Capital Management has continued to buy and now owns 16.3 million shares in Nike, a person familiar with the position said. Ackman was not immediately reachable for comment.
A person familiar with Ackman's thinking said that Hill would have been his top choice to replace Donahoe. Ackman, who announced his Nike stake via a public filing, had not been in touch with the company.
Hill's background 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 shoes in 2023 had been slipping on the resale market as other sneaker brands, including On Running, experienced meteoric growth.
In the last couple of years, Nike had curtailed partnerships with retailers and pushed ahead with its plan to drive more sales through its own stores and websites. Those sales did not materialize and put the company on $2 billion cost savings route.
As part of the plan, Nike has so far cut jobs, reduced supply of classic shoes such as the Air Force 1 and tried to improve supply chain to boost margins.
"It clearly looks like Nike wanted to bring back somebody with a lot of experience" and "deep knowledge of Nike and its issues-- unlike John Donahoe, who came in without any experience in the industry," said David Swartz, senior analyst, Morningstar Research.
Hill will have to "work on repairing some of Nike's relationships" with retail partners who buy Nike shoes at wholesale, Swartz added. "Nike has dropped some customers over the years and pulled back some product and that has created some ill will towards Nike" among sneaker and footwear retailers, he said.
Thomas Hayes, chairman at Great Hill Capital, called Hill a “great pick.” Nike now needs to “innovate and repair relationships with wholesalers,” he added.
Nike’s $11 billion increase in stock market value in extended trade following the announcement late suggests how much investors value Hill.
By comparison, Starbucks’ value surged by $21 billion in one day after the coffee seller on Aug. 13 announced it hired away Chipotle Mexican Grill CEO Brian Niccol. Chipotle’s value fell by almost $6 billion on the same day.
Additional reporting by Ananya Mariam Rajesh in Bengaluru and Svea Herbst-Bayliss in New York; Editing by Shounak Dasgupta, Peter Henderson, Matthew Lewis and Anna Driver
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अस्वीकरण: XM Group के सत्व केवल निष्पादन वाली सेवा और हमारी ऑनलाइन व्यापार सुविधा में पहुँच प्रदान करते हैं, ताकि व्यक्ति वेबसाइट पर या उसके जरिए उपलब्ध सामग्री को देख सके और/या उसका उपयोग कर सके। इसका प्रयोजन इसे बदलना या विस्तार देना नहीं है, न ही वह इसे बदलता या विस्तार देता है। इस तरह की पहुँच हमेशा ही निम्नलिखित के अधीन रहेगी: (1) नियम और शर्तें; (2) जोखिम चेतावनियाँ; और (3) पूर्ण अस्वीकरण। इसलिए ऐसी जानकारी सामान्य सूचना से अधिक कुछ भी नहीं है। विशेष रूप से, कृपया इससे अवगत रहें कि हमारी ऑनलाइन व्यापार सुविधा की सामग्रियाँ न तो किसी चीज का अनुरोध करती हैं, न ही वित्तीय बाजारों में प्रवेश करने की पेशकश ही करती हैं। किसी भी वित्तीय बाजार में व्यापार करने के साथ आपकी पूँजी को उल्लेखनीय जोखिम है।
हमारी ऑनलाइन व्यापार सुविधा में प्रकाशित सभी सामग्रियाँ शैक्षणिक/सूचनात्मक प्रयोजनों मात्र के लिए हैं, और इनमें वित्तीय, निवेश टैक्स या व्यापार सलाह और सुझाव नहीं हैं - न ही ऐसा समझना चाहिए कि इनमें ये सब हैं; न ही इनमें हमारी व्यापार कीमतों का अभिलेख है; न ही इनमें किसी वित्तीय उपकरण में लेन-देन करने का निमंत्रण या अनुरोध है; न ही ये आपको अवांछित वित्तयी प्रोमोशन पेश करती हैं।
इस वेबसाइट में मौजूद कोई भी तृतीय पक्षीय सामग्री, तथा XM द्वारा तैयार की गई सामग्रियाँ, जैसे: अभिप्राय, समाचार, अनुसंधान, विश्लेषण, कीमतें और अन्य सूचनाएँ या तृतीय पक्षों की साइटों के लिंक, "जैसा-है-वैसा" के आधार पर बाजार के बारे में सामान्य टिप्पणी के रूप में उपलब्ध कराई गई हैं, और वे निवेश हेतु सलाह नहीं हैं। जिस हद तक कीसी सामग्री को निवेश अनुसंधान मान लिया जाता है, उस हद तक आपको ध्यान में रखना होगा और इसे स्वीकार करना होगा कि वह सामग्री इस उद्देश्य से और निवेश अनुसंधान की स्वतंत्रता को बढ़ावा देने के लिए कानूनी आवश्यकताओं के मुताबिक, तैयार नहीं की गई है, और इसलिए उसे प्रासंगिक कानूनों और विनियमों के तहत विपणन संप्रेषण माना जाएगा। कृपया सुनिश्चित करें कि आपने गैर-आश्रित निवेश के बारे में हमारी सूचना को पढ़ और समझ लिया है। पीछे दी गई जानकारी के बारे में अनुसंधान और जोखिम चेतावनी यहाँ उपलब्ध है।
