Nike Sales Fall but Stock Rises as New CEO Talks Turnaround

Nike’s new CEO, Elliott Hill, said Thursday the company needs to refocus its attention on running tracks, soccer and basketball courts.

In his first earnings report as the company’s top executive, Hill said Nike’s “clear priority is to put sports back at the heart of everything we do.”

The company reported quarterly revenue of $12.4 billion, down 8% but better than the 9% decline expected by Wall Street analysts. Nike shares rose 8% in after-hours trading within 30 minutes of the earnings report.

Hill, a popular insider, began work on October 14th.

Thursday’s earnings report marked his first public comments on the company.

“We are taking immediate action to reposition our company so we can return to driving long-term shareholder value,” he said in a press release. “Our team is ready to go and I’m confident you’ll see more moments where Nike is Nike again.”

Under former CEO John Donahoe, Nike bet heavily on direct sales and retro sneakers, moves that paid off early in the pandemic but later failed as smaller, savvier rivals filled the shelf space vacated by Nike, including in running stores.

A year ago, Nike announced a $2 billion cost-cutting measure. In February, the company announced it would cut 2% of its global workforce, which eventually included more than 700 employees in Oregon, including a significant number of executives and managers.

Before his final day as CEO, Donahoe announced a turnaround plan that included a greater focus on sports, faster product launches, better marketing and rebuilding Nike’s wholesale business.

While Hill celebrated his first public comments as CEO on Thursday, Nike’s recent moves suggested he would continue to refocus on sports. Since he began work, the company has extended his contracts with the WNBA and NBA for 12 years and with the NFL for another 10 years. In addition, part of the company that made virtual sneakers for the Metaverse was closed.

This story will be updated.

– Matthew Kish covers companies including the sportswear and banking industries. Reach him at 503-221-4386, [email protected] or @matthewkish.

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