Nike: John Donahoe resigns as CEO

(CercleFinance.com) - On Thursday evening, Nike announced the resignation of John Donahoe, its CEO since 2020, who plans to leave the sports equipment manufacturer on 13 October.
NB pmt +6.7%.

The US sporting goods group specifies that he will be replaced on that date by Elliott Hill, a former company executive who was in charge of business development for the Jordan brand until his departure in 2020.

Hill had also held a number of senior positions encompassing activities in Europe and North America representing a total sales scope of over $39bn.

These changes come at a time when Nike's share price has fallen by more than 25% since the start of the year, compared with a gain of 11.5% for the Dow Jones index, of which it is a component.

Since John Donahoe took up his post in January 2020, the stock has lost 20% of its value.

From the analysts' point of view, this change could enable the Beaverton, Oregon-based group to return to a more favorable operational and stockmarket dynamic.

We believe that this much-anticipated transition at management level will precipitate a return to product innovation, storytelling and marketing, and the rebuilding of partnerships with wholesalers, all areas that had previously been abandoned, resulting in significant underperformance in terms of profitability and shareholder returns, Deutsche Bank says.

The broker adds that the restructuring plan launched by John Donahoe, a former eBay boss, ended up demoralizing the workforce, a dynamic which it believes could be reversed with the arrival of Elliott Hill, who enjoys a good reputation with both employees and business partners.

While acknowledging that business fundamentals remain fragile, as illustrated by the disappointing forecasts delivered by the group at the end of September, Deutsche Bank believes that the next investors' meeting, scheduled for November 19, could give a boost to market sentiment.

Nike shares thus posted gains of over 7% on Friday in pre-market electronic trading.


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