Nike’s Mission to Return to Profitability: Reignite its Legacy

Nike’s journey back to profitability, led by a newly strengthened leadership team, marks a pivotal moment in the company’s storied history. With a new CEO at the helm, Nike is focused on three core areas – product, brand and market – and aims to return to its position as a global leader in sportswear.

Long synonymous with innovation and sports culture, Nike has suffered some setbacks in recent years. In recent quarters, Nike has faced challenges including lower sales and digital lagging, pointing to a consumer divide. Nike’s second-quarter results, released on Thursday (December 19), showed an 8% decline in sales, with Nike Direct sales falling 13% and Converse sales falling 17%. Despite these setbacks, the company’s leadership is aware that the path to profitability lies not only in regaining market share, but also in redesigning the core of the brand.

Feel the sense of urgency‘

“We, the entire Nike team, feel the urgency here,” President and CEO Elliott Hill told analysts during the conference call. “It’s time to get back on track and win again.”

Hill, who retired from Nike in 2020, replaced John Donahoe and is aiming to return the brand to its sports-focused roots and build a digitally-focused lifestyle brand under Donahoe. During his time at Nike, Hill held senior leadership positions in Europe and North America. Before retiring in 2020, he served as President of Consumer and Markets, leading all commercial and marketing activities for Nike and Jordan Brand, including managing profit and loss across the company’s four global regions.

“We lost our obsession with sports,” Hill said. “Going forward, we will lead with sport and put athletes at the center of every decision because that is what drives our culture.”

Sport and athlete-centered strategies

“Nike’s goal is to reignite its legacy by leading in sports and creating authentic, emotional connections with consumers through compelling storytelling and sports moments,” Hill said. This strategic shift underlines that sport makes the Nike brand authentic and resonates with its core target group.

Nike’s strategy includes a strong focus on specific playing fields, including running, training, sportswear and core products, Hill said. The company will reinvigorate its product range with innovations, ensuring that its offerings not only match current trends but are also ahead of the curve in terms of performance and design. By doubling down on its most iconic products and introducing new designs, Nike aims to reconnect with athletes and sports enthusiasts and establish the brand as a symbol of excellence and performance.

“I’m excited to be back at Nike and working with my teammates,” Hill said. “I have an irrational love for this company.”

Expansion of the Nike Marketplace

The company’s commitment to its digital and physical market is also a key element of its strategy, Hill said.

Nike’s marketplace – both in its stores and online – has undergone a transformation to make it more consumer-centric, with a particular focus on delivering a premium experience, Hill said. The company is transitioning Nike Digital to a full-price model to move away from excessive promotions and focus on providing high-quality, innovative products that justify their price. As part of this effort, Nike aims to improve the consumer experience across both digital platforms and physical stores.

“Nike Direct traffic has declined because we lacked novelty and became way too promotional,” Hill said. The company’s goal is to leverage Nike’s physical stores, digital platforms and wholesale relationships to create a more integrated marketplace. Nike will continue to build relationships with top partners to ensure product storytelling is consistent across all platforms.

Strategic investments in sports marketing and storytelling

Another focus for Nike is relationships with athletes and influencers, Hill said. Nike has long been known for its iconic sports marketing, and the company plans to be more aggressive in this area. The company intends to highlight its athletes and sports moments in bolder and more creative ways, reinvigorate its marketing campaigns and work with athletes to amplify the brand’s message.

Nike’s renewed commitment to sports marketing will drive growth through its partnerships with sports icons, Hill said. Company leadership emphasized that these partnerships are critical to the brand’s future success, especially as Nike seeks to inspire consumers and connect with them on a deeper level. As part of its sports marketing efforts, Nike will focus on high-profile athletes and impactful sporting events, leveraging these moments to reach new audiences and strengthen the brand’s connection to sports.

The way forward: optimism and confidence

Despite the challenges Nike has faced in recent years, Hill is confident about the company’s future.

“We are optimistic about the ongoing measures,” Hill said. “We will win when our partners win. Sport is what defines our brand. Our talent is world class. The teams are inspired and ready to go. We will win as a team. My main purpose for being here is to take our consumers, our great athletes and this great company to a new place. It’s an ambitious vision and I firmly believe only Nike can make it happen.”