Nike: CEO Switch Is Part of Plan to Return to Winning Ways; Shares Undervalued

Nike announced that CEO John Donahoe is leaving and will be replaced by former executive Elliott Hill. Donahoe has been under intense pressure in recent months after the firm had essentially no sales growth in fiscal 2024 and guided to lower revenue in fiscal 2025. Although he had a strong background in consulting and technology when he was named CEO in 2019, he did not have apparel and footwear experience. In contrast, Hill worked at Nike for 32 years before his retirement in 2020, with his last title being president of consumer and marketing. Clearly, Nike’s board (including the controlling Knight family) wanted a leader with extensive company knowledge to address its recent problems, the most pressing of which is that Donahoe’s efforts to prioritize direct selling over product development and retail relationships have seemingly created opportunities for more innovative competitors.