Nike stock pops after retailer names former executive Elliott Hill as CEO

Fri, Sep 20, 2024, 6:43 AM 2 min read

"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,” Nike executive chairman Mark Parker said in a press release.

The news comes as Nike stock has stumbled this year, falling more than 25% amid slowing revenue growth and concerns about the success of the company's pivot to direct-to-consumer sales.

"This is very good news for the stock, both the executive named as well as the timing," Bernstein senior analyst Aneesha Sherman told Yahoo Finance. "Elliott Hill has worked at Nike for 32 years. He's a product guy. He's ran retail in [Europe, Middle East, Africa] and US in North America. He knows the company and the product very well."

The Nike swoosh logo is seen outside the store on 5th Ave in New York, New York, U.S., March 19, 2019. (REUTERS/Carlo Allegri/File Photo) · REUTERS / Reuters

The stock fell 20% in June when the company reported fiscal fourth quarter earnings and said it expects revenue to decline more than it previously thought in the coming year. The company said quarterly revenue in the fourth quarter fell 2% from the year prior to $12.61 billion, below Wall Street's estimates for $12.86 billion. Meanwhile, Nike's $0.99 earnings per share exceeded analysts' expectations of $0.66. Nike's direct-to-consumer sales declined 8% from the same quarter a year ago to $5.1 billion.

Wall Street has been closely watching Nike's product pipeline as the Oregon-based company works to fend off competition in its core athletic footwear market from rivals like Adidas (ADDYY) and relative upstarts like On (ONON) and Deckers' (DECK) Hoka brand.