By Juveria Tabassum and Nicholas P. Brown
(Reuters) – Nike said on Thursday that former executive Elliott Hill will join the company to succeed John Donahoe as chief executive officer, as the sportswear giant shakes up its leadership as it seeks to revive sales and fend off growing competition.
The company’s shares rose 8% in after-hours trading.
Hill worked at Nike for 32 years, holding leadership positions in Europe and North America. He was responsible for helping the company grow to more than $39 billion, the company said.
He previously served as president of Nike’s consumer business, 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 chairman and CEO will include an annual base salary of $1.5 million. Hill will take over as CEO on Oct. 14.
Analysts welcomed the move. The CEO change “sends a positive signal because this is someone who knows the brand and the company very well,” said Jessica Ramirez of Jane Hali & Associates.
Donahoe was tasked with strengthening Nike’s online presence and driving sales through direct-to-consumer channels.
The move initially helped the company capitalize on demand for athletic and leisure apparel after the pandemic, helping Nike reach more than $50 billion in annual sales for the first time in fiscal 2023.
However, sales have since come under pressure and growth has slowed, according to estimates compiled by LSEG. Nike’s annual sales fell to $48.87 billion in fiscal 2025 as inflation-weary customers cut back on discretionary spending and the Chinese market rebounded more slowly than expected.
The lack of innovative and attractive products has also dampened demand for Nike. Competing brands, such as Roger Federer-backed On and Deckers’ Hoka, are attracting buyers and retail partners with products that are seen as more fashionable and trendy.
Expectations of a change at the top of the company were heightened after billionaire investor William Ackman disclosed a stake in Nike. His firm Pershing Square Capital Management has continued to buy and now owns 16.3 million Nike shares, a person familiar with the situation said. Mr. Ackman was not immediately available for comment.
A person familiar with Ackman’s thinking said Hill would have been his first choice to replace Donahoe. Ackman, who announced his stake in Nike through a public filing, had not been in contact with the company.
Hill’s experience as the former head of Nike’s valuable Jordan brand, a major profit generator for the company, could also help the sportswear giant regain some momentum. The value of some 2023 Jordan shoes has plummeted on the resale market while other sneaker brands, including On Running, have seen meteoric growth.
In recent years, Nike has cut back on its partnerships with retailers and pursued its plan to increase sales through its own stores and websites. Those sales have not materialized, forcing the company to cut costs by $2 billion.
As part of the plan, Nike has so far cut jobs, reduced the offering of classic shoes like the Air Force 1 and tried to improve the supply chain to boost margins.
“It clearly seems like Nike wanted to bring back someone with a lot of experience” and “a deep understanding of Nike and its issues – as opposed to John Donahoe, who came in with no industry experience,” said David Swartz, senior analyst at Morningstar Research.
Hill will have to “work on repairing some of Nike’s relationships” with retail partners who buy Nike shoes in bulk, Swartz added. “Nike has lost customers over the years and pulled some products, which has created some hostility toward Nike” among sneaker and shoe retailers, he said.
Thomas Hayes, chairman of Great Hill Capital, called Hill a “very good choice.” Nike now needs to “innovate and repair its relationships with wholesalers,” he added.
The $11 billion increase in Nike’s stock price in extended trading following the late announcement suggests how much investors value Hill.
By comparison, Starbucks’ stock jumped $21 billion in a day after the coffee maker announced on Aug. 13 that it had hired Chipotle Mexican Grill CEO Brian Niccol. Chipotle’s stock fell nearly $6 billion that 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)
