Nike is in “cleanup mode,” but its chief executive officer has nothing but confidence in the iconic American company.
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CEO Elliott Hill spoke to NBC News in an exclusive interview last week at the company’s Beaverton, Oregon headquarters, where he said his faith in the company’s turnaround led him to purchase more than $2 million worth of the firm’s shares on April 13.
That date is also when Nike shares hit their lowest point since late 2014.
Nike has faced a yearslong sales slump as it tries to regain its market dominance. Good sales results in its North American home market have often come in the shadow of weakness in the European, Middle Eastern and Chinese markets. Nike’s recent results appear to show the turnaround taking longer than expected.
“I think it’s a reflection on where we are in this moment in time,” Hill said. The interview was the first installment in NBC’s new series, “Business in America,” which launched Monday.
“We’re in a cleanup mode and we’re [in] resetting mode, getting our foundation set,” he said.
Hill and his executive team are “setting this business up for the next 40 years,” he added.
For Hill, who took over as CEO in October 2024, it took time to adjust to the scrutiny that comes with being a high-profile chief executive.
“It’s been a bit of adjustment for me, having to learn to do these types of interviews, to be visible, to have media, fans, Wall Street watching your every move and critiquing it,” he said.
While Nike’s stock price has risen about 4.5% since its low in April, shares are down by more than 50% since the company announced that Hill had been tapped for the top job in September 2024, a month before he started.
Some analysts think Nike may still have further to fall.
The company released its most recent earnings report on March 31, showing that sales were flat from a year ago, at $11.3 billion.
Nike also projected that revenue in the current quarter would decline between 2% and 4%. For the full calendar year, the company predicted that revenue would only be in the low single digits.
“The environment around us has become increasingly dynamic and could experience unplanned volatility due to the disruption in the Middle East, rising oil prices, and other factors that could impact either input costs or consumer behavior,” Nike’s chief financial officer, Matthew Friend, said on the company’s earnings call in March.
On April 10, analysts at Bank of America downgraded Nike stock from “Buy” to “Neutral,” citing what they viewed as “a longer path to recovery to normalized earnings.”
Analysts at UBS wrote April 13 that investors were “wondering if earnings estimates and sentiment have fallen far enough to justify buying [Nike] stock now. The consensus view is not yet and we agree.”
“Nike still has much to prove,” they added.
Asked what Wall Street may not understand about Nike, Hill said, “It takes time.”
“It’s a big company — 78,000 employees — it takes time to reorient a company around three brands in sports,” he said. The company’s three brands are its namesake Nike brand, Converse and the Jordan brand.
“It takes time to reinvest in the relationships that exist out in the marketplace. And we’ve got to earn that back,” he said.
Hill acknowledged the mammoth task before him, but said, “I don’t spend a lot of time looking backwards.”
The company’s lackluster performance in recent years was due to “a couple strategic shifts that happened,” he said, and “Covid didn’t help.”
Hill said that Nike’s pivot to a direct-to-consumer model, which sent the stock sharply higher throughout 2020 until its peak in 2021, “made sense” for a time, but the company now needs to “shift back.” Under Nike’s prior CEO, the company prioritized selling direct-to-consumer during the pandemic over partnerships with retailers.
“Where we make mistakes is when we forget who we’re serving,” Hill said. “We’re serving consumers, we’re serving athletes and we had to shift back — and we’ll continue to do this — to serve them through sport, and we’ll serve them wherever they choose to shop.”
Nike has also faced challenges in the China market. “The path back is through sport,” Hill said.
Nike has a “new leadership team, new strategy in place” for China, and “we’re cleaning up the digital marketplace” in the country while elevating physical stores there.
Hill said that Nike was also in the process of applying for tariff refunds from the U.S. government and would use that money to invest in the company.
“We’re playing the long game here,” Hill said of Nike’s overall turnaround plan. “This thing will play out over time, and we’re looking forward to it.”
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