The clock’s ticking for Nike’s new CEO to revive the brand’s appeal
Subscribe to enjoy similar stories. Incoming Nike chief executive officer Elliott Hill could learn a lot from his counterpart at Adidas, Bjorn Gulden. In formulating his strategic blueprint, Hill should follow Gulden in making Nike nimbler and introducing some winning products, like Adidas’s Samba.
But he should take a leaf out of Gulden’s book in another way too: He should not miss the opportunity to reset sales and earnings expectations lower for the coming fiscal years, making them more realistic and reflective of the fact that it won’t be quick or easy to turn around the Nike business juggernaut. Nike laid the groundwork for this on Tuesday when it withdrew guidance for the year to the end of May 2025, choosing to set expectations quarterly instead. This came after first-quarter sales fell 10% to $11.6 billion.
Nike anticipates another 8% to 10% decline in the second quarter, as it deliberately cuts back on the supply of styles such as the Nike Dunk, Air Force 1 and Air Jordan 1, where demand had waned after initial popularity. Its gross margin will likely be down by 1.5 percentage points. It expects trends to gradually improve in the second half of the year.
The company has also postponed an investor day that was due to take place next month to give Hill more time to come up with his revival plan. When Gulden arrived at Adidas in January 2023, he found a company in crisis. Adidas had ended its lucrative, almost decade-long partnership with rapper Kanye West, now known as Ye, and was stuck with a closet full of old Yeezy sneakers.
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