Nike (NYSE:NKE) announced that Elliott Hill will take the helm as President and Chief Executive Officer effective October 14, 2024. Following the news, the company's shares jumped nearly 7% in premarket trading Friday.
The transition comes as current President and CEO, John Donahoe, prepares to retire from his role and from the Board of Directors on October 13. Donahoe will continue to serve as an advisor to the company until January 31 to support a smooth changeover.
Mark Parker, Executive Chairman of Nike, praised Hill's global expertise and leadership, emphasizing his comprehensive understanding of the industry and the company's partners.
Parker also acknowledged Donahoe's significant contributions, especially his leadership during the COVID-19 pandemic and his support for the company's community investments. Donahoe expressed confidence in Hill as the right choice for the company's future leadership.
Hill, who previously retired from Nike in 2020, has a long history with the company, having held senior leadership roles in both Europe and North America.
Commenting on the announcement, Bank of America (NYSE:BAC) analysts stated that "now is the right time for a shakeup" at Nike. They cited a 42% drop in consensus earnings estimates over the past 24 months, along with the company's efforts to implement a strategic change.
"In our view, Nike needs someone with a fresh perspective to lead it through the next strategy and accelerate the focus on product," BofA analysts wrote.
"We think Hill’s 30+ year history with the company in senior roles across the organization bodes well for the effort to rejuvenate innovation, rekindle wholesale relationships, and rebuild sales."
Similarly, RBC Capital Markets analysts view the return of a long-time Nike insider to the CEO role as a positive development. They believe the company’s recent underperformance stems from a loss of focus on the factors that have driven Nike's success over the years.
"Under Mr. Hill’s leadership, we hope to see a revitalization of the NIKE culture (the good parts) and a renaissance in innovation and design," they stated in a note.
However, with the CEO change, analysts said investors should expect a further reset to financial forecasts, potential changes within the executive team, and an extended period of product revitalization.
Senad Karaahmetovic contributed to this report.