Nike leadership shakeup: What to know?

Nike unexpectedly announced that its CEO of four years, John Donahoe, will retire next month, and company veteran Elliott Hill will return. The decision comes amid slowing sales and a year of stock decline for the sports brand.

The shoemaker’s stock has been down roughly 24% this year before the announcement. In June, the company also announced that it was expecting its sales to drop, which could be attributed to previous decisions like prioritizing direct-to-consumer sales over in-store sales. The move allowed competitors like Hoka and On to swoop in and take up the retail space Nike left behind.

The brand also faced other challenges over the past few years, including layoffs (that didn’t help with employees’ morale) and declining revenue in North America due to a lack of new designs.

Analysts believe the leadership shakeup could help Nike refocus on its core strengths: product innovation and marketing prowess.

Outgoing CEO Donahoe navigated Nike through challenges like the COVID-19 pandemic, e-commerce growth and supply chain issues. However, he wasn’t seen as an innovator or marketer.

Incoming CEO Hill has previously overseen commercial and marketing operations for Nike and the Jordan Brand.

Despite Nike’s challenges, Wall Street remains optimistic about the brand’s future. Billionaire investor Bill Ackman recently bought a $250 million stake in the company. Some analysts are predicting a potential 39% stock increase.