Nike staff celebrate new CEO with Barack Obama ‘Hope’ meme.

Hill, a Nike veteran, is coming out of retirement to replace CEO John Donahoe, who is stepping down as Nike’s strong growth falters. Mark Parker, Donahoe’s predecessor and Nike executive chairman, called Hill “the right person to lead Nike’s next stage of growth,” and Knight, Nike’s co-founder, said he was “exactly what is needed at this time.”

Nike has rarely experienced a time like this. Over the past 20 years, the company has distanced itself from competitors such as Adidas. But in June, it said annual revenue would decline, leading to the stock’s biggest decline in its history. Analysts attributed the struggles to a lack of new products, withdrawals from retail partners and growing competition — all issues Hill needs to fix.

“Hill will face the challenge of adapting to significant changes in the marketplace, including increased competition,” Jefferies analyst Randal Konik said in a note to clients, “and most importantly, changes in product innovation .”

Investors are optimistic that Hill is the right person to lead Nike’s revival efforts. Shares rose as much as 8.7 percent in New York on Friday. The stock had fallen 25% this year through Thursday’s close.

Hill will turn 61 before returning to Nike headquarters in Beaverton, Ore., on Oct. 14. He will live nearby in the Portland area.

Following Thursday’s announcement, several celebrations broke out on Nike’s campus as staff high-fived and hugged, according to an employee. Some staff brought out bottles of prosecco. A mock meme of Hill’s portrait as Barack Obama’s “Hope” poster circulated in the Nike community, a former executive said.

Top Nike executives considered Hill a vital component of the brand’s rise under Knight and Parker, working in numerous parts of the organization during his 32-year tenure. Those who have worked with the Texas native describe him as a good listener who collaborates well, winning people over with his Southern charm.

Decades at Nike

Hill started at Nike as an intern in Memphis in 1988, rising to oversee the retail and e-commerce businesses in various regions in the 2000s. He also led the global retail segment, launching Nike franchise stores in China. In 2010, the executive took charge of Nike’s North American operations, increasing sales in the region by 60% in four years. He was then promoted to president in a global role.

Over the years, Hill has developed close relationships with Nike’s biggest figures, including Knight, Parker and the company’s superstar endorser Michael Jordan, according to people familiar with the matter. At one point in his career, Hill helped convince Jordan to seek global expansion, even though the NBA legend had his doubts.

When Donahoe was hired in 2020, Hill led all commercial and marketing operations for both the Nike and Jordan brands. At the time, Hill was considering retirement and told colleagues he was looking forward to relaxing at his home in Tuscany and cycling through the Italian countryside with his wife Gina. On his way out, Donahoe and his management team held a farewell dinner for him, and Knight was a surprise attendee.

During his retirement, Hill started a baseball club in Austin, served on the board of Texas Christian University, and kept in touch with Knight — though they talked less about sneakers and more about conference realignment in university sports.

The looming change

Once Hill takes over, company insiders expect a change in senior management. Other candidates for CEO have been speculated to be Nike’s two presidents: Heidi O’Neill and Craig Williams. Former COO Eric Sprunk’s name was also floated, and many hoped Parker would resume his old job.

Nike is set to report its quarterly earnings results on Oct. 1, ahead of Hill’s first day, but Wall Street is already looking ahead to Nov. 19, when the company will host analysts for its investor day event.

Investors are looking to the new CEO to provide clarity on Nike’s path forward and whether it will continue to focus on direct-to-consumer channels instead of its retail partners. Under Donahoe, Nike slashed sales teams and ended relationships with more than half of its wholesalers, creating an opening for competitors to move into those vacant spaces.

“The next step is to work on their relationships with partners – only then can they really get back to embracing customers,” said Simeon Siegel, an analyst at BMO Capital Markets.

Investors are especially eager to hear Hill’s plans to speed up product development, which has slowed under Donahoe’s watch. Sales of Nike’s lifestyle sneakers — such as the Dunks, Air Force 1 and Jordan 1 — are declining, and the company hasn’t produced the kinds of innovative new products that Nike has long relied on.

“We do not believe Mr. Hill is considered a ‘product person,'” UBS analyst Jay Sole said in a note to clients. “The market may question whether Mr. Hill has the right skills to help Nike solve its product problem.”