Nike Faces Rare Slowdown Amid CEO Transition
When long-time Nike veteran Elliott Hill returns to the sportswear giant in the role of President and CEO on Monday, October 14, he takes on a challenging task, as the company is currently facing a rare slowdown in its long history as a growth company. Earlier this year, Nike had one of the worst days in years, when its share price slid nearly 20 percent after the company had forecast a significant sales decline for the fiscal year ending May 31, 2025.
Given Nike’s difficult past few months – the company’s stock price is down 25 percent this year - the CEO transition announced on September 19 didn't come as a huge surprise, as the outgoing CEO John Donahoe was seen as too invested in the company's direct-to-consumer strategy, which had failed to deliver the expected results. Adding to that the fact that brands like Adidas and New Balance were catching up with or even beating Nike in the lifestyle sneaker segment, calls for a change of leadership at Nike were naturally getting louder.
"I am excited to welcome Elliott back to Nike," Mark Parker, Executive Chairman of the company said in a statement. "Given our needs for the future, the past performance of the business, and after conducting a thoughtful succession process, the Board concluded it was clear Elliott’s global expertise, leadership style, and deep understanding of our industry and partners, paired with his passion for sport, our brands, products, consumers, athletes, and employees, make him the right person to lead Nike’s next stage of growth."
As our chart shows, there have been very few setbacks in Nike’s impressive growth story. Since its founding days in the early 1970s until today, the company has never seen two consecutive years of declining sales. Time will tell if that streaks continues.