Nike CEO Elliott Hill’s First Year: Analysts Grade B as Sales Struggle

UPDATE: Nike CEO Elliott Hill marks his first year at the helm amid ongoing challenges, as analysts assign a grade of B to his turnaround strategy. Hill, who rejoined Nike on October 14, 2024, faces critical headwinds with sales down 9% to $46.3 billion for fiscal year 2025.

Despite an initial stock surge of 8% upon his appointment, Wall Street is expressing concerns over the pace of recovery. Analysts highlight that Hill’s ambitious “win now” strategy, aimed at revitalizing Nike’s focus on sports, is taking longer than anticipated to yield results.

In the quarter before Hill’s arrival, Nike’s revenue fell 10% year-over-year, signaling the urgency for immediate action. Hill has identified key areas for improvement, emphasizing the need to strengthen relationships with wholesale partners and reduce reliance on retro styles, which have stunted growth in core categories like running.

While some analysts, including those from Goldman Sachs, recognize the potential of Hill’s strategy, they caution that the turnaround may not happen overnight. Goldman Sachs noted, “The shares lack a catalyst to materially propel them higher until there is greater visibility on brand recovery.”

Hill’s “win now” strategy focuses on five key areas: culture, product, marketing, marketplace, and physical presence. Recently, Nike’s running category reported a significant growth of 20% last quarter, showcasing some positive results from Hill’s initiatives.

In addition, Hill is prioritizing the women’s sports market, launching notable campaigns including Nike’s first Super Bowl commercial featuring female athletes in nearly 30 years. Partnerships with the WNBA and collaborations with star athletes like A’ja Wilson are also part of this renewed focus.

However, challenges remain. Nike’s digital sales are down 12% year-over-year, following a 14% decline in direct revenue last fiscal year. Hill’s decision to reduce promotional activities has been a double-edged sword, causing traffic to Nike’s stores to decrease for eight consecutive months.

Analysts emphasize that while there are signs of progress, such as a 7% revenue increase in wholesale partnerships, the company’s long-term success hinges on navigating pressures from tariffs, market competition, and evolving consumer preferences.

As Hill stated in a recent earnings call, “We’re in the early stages, and our comeback will take time, and our progress won’t be linear.”

With analysts’ mixed reviews and consumers watching closely, Nike’s path forward under Hill remains a developing story. Industry watchers will be keen to see if his strategies can truly restore Nike’s competitive edge in the fast-evolving sportswear market.

Stay tuned for further updates as this story unfolds.