Nike Goes Back To Its Roots In Hopes Of Getting Back In Shape

Nike Inc NKE marked this week with news of longtime executive Elliott Hill’s triumphant return as the new CEO. Putting its global brand recognition aside, Nike has had its fair share of struggles over the past few years. Executive chairman Mark Parker alluded to the need for changing course, stating that Elliott’s global expertise, leadership style, and deep understanding of the company’s doings, paired with his passion for sport, Nike brands, products, consumers, athletes, and employees, make him the right person to unlock the next stage of growth. 

Nike Needs To Return To Stock Market Glory

Nike has spent decades building one of the most recognizable brands and worked its way to a market capitalization of over $130 billion. But at one point in time, its market cap was over $280 billion. During the fiscal 2024 that ended on May 31st, Nike’s struggles got worse. While the running shoes trend sprinted, Nike stagnated. Fourth-quarter sales dropped 2% YoY with Nike Direct sales contracting 7%, digital sales dropping 10%, while wholesale was a rare bright spot with 8% growth. Gains in performance products that increased in double digits were more than erased by struggles of the lifestyle business. For the current fiscal 2025, Nike guided for low-single-digit drop in revenue, while expecting a high single digit drop during the first half of the fiscal year. Nike’s shift towards direct channels backfired, with too much reliance on those channels and losing touch with what its consumers really want being among its main issues. 

The Iconic Sneaker And Sport Apparel Brand Needs To Get Back In Shape

Hill left the sporting apparel giant in 2020, but as a longtime Nike veteran, he’s inspiring confidence in his ability to get Nike back in shape. Like the coffee giant, Starbucks Corporation SBUX, Nike took a chance on an outsider CEO with tech experience, hoping to raise their game. Starbucks got Kevin Johnson who had experience with no other than the tech titan, Microsoft Corporation MSFT. Nike hoped that it will change the game with John Donahoe who brought his eBay Inc EBAY know-how. But Nike admitted its mistake by changing course and going back to a CEO who knows the company inside and out. As of October 14th, Hill will have a shot at mending Nike’s missteps and putting an end to its struggles.

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