NEW YORK (S&P Global Ratings) Sept. 24, 2024
Mr. Hill retired from Nike in 2020 after 32 years with the company, holding the position of president-consumer and marketplace from 2018-2020. The announcement comes on the heels of strategic changes to launch more innovative products and pull back sales on large franchises such as Airforce 1, Air Jordan 1, and Dunks. As a result, we forecast sales to decline nearly 5% in fiscal 2025.
Furthermore, the company is reverting to an omnichannel approach and rebuilding relationship with retailers it pulled away from in recent years, when it targeted 50% of sales from its direct-to-consumer business, which includes owned applications. Mr. Hill will be tasked with executing these changes and winning back market share lost to competitors that filled shelves left by Nike’s vacancy. Specifically, Nike has lost its footing in the specialty running category, specifically losing market share to newer entrants Hoka and On Running, and legacy competitors Adidas and New Balance have retained their positions in the lifestyle category.
The sneaker behemoth announced pushing-forward innovations in lines such as Pegasus to help reignite growth. Still, Nike’s credit metrics remain strong with leverage under 1x, giving it some runway to execute its new strategy.
