Nike chief executive John Donahoe will retire next month, the company announced Thursday — marking the latest shake-up for the sneaker giant during a period of sluggish sales.
Donahoe’s last day with Nike will be Oct. 13, but the company said in a news release he will remain as an adviser through the end of January. The embattled CEO, who took the helm at Nike in January 2020, will be replaced by Elliott Hill, a former Nike executive who retired in 2020.
The leadership shift comes during a rough patch for Nike. The athletic apparel maker reported lackluster sales of $51.4 billion in its most recent quarter — a year-over-year decrease of 2 percent and the slowest pace of annual sales growth in the company’s 60-year history, according to SEC filings. The company’s shares have fallen 24 percent this year.
Nike shares rose 0.1 percent on Thursday, closing at $80.98, and climbed during after-hours trading after the announcement.
Nike has been plagued by slower sales growth, rising competition from other footwear brands such as Hoka and New Balance, and weakener consumer spending in the United States. The sneaker giant announced a three-year cost-cutting plan in December after multiple quarters of disappointing sales in its key markets. It’s also in the process of laying off up to 2 percent of its staff.
Analysts have attributed Nike’s struggles to its shift toward selling in its own stores and on its website, rather than via wholesale channels. The company’s wholesale revenue rose 5 percent in its most recent quarter, but direct-to-consumer revenue declined 8 percent from the same period last year.
Before retiring, Hill held senior leadership positions across Europe and North America and “was responsible for helping grow the business to more than $39 billion,” Nike said in its release. He was working as Nike’s consumer and marketplace president before he stepped down in 2020.
Hill isn’t the only former Nike executive whom the company has tapped for help this year. In July, Nike rehired Tom Peddie as its marketplace partners vice president. A former Nike senior executive who spent 30 years with the company, Peddie retired in 2020 but was coaxed back to help the struggling brand improve its relationship with shoe sellers.
