Nike's shares jump after it announces plan to replace CEO

STORY: On Thursday Nike announced plans to toss out its president and CEO John Donahoe, as demand falters for the brand's sneakers.

He'll be replaced by former senior executive Elliott Hill, who will take over next month.

Nike’s shares rose in after-hours trading after the news.

Nike's strategy under Donahoe over the past few years - driving customers directly to its own stores and websites, cutting out retailers in the middle - worked at first.

Under his lead Nike exceeded $50 billion in annual sales in last year, partly helped by soaring demand for sportswear after the pandemic.

But growth lost steam, and Nike seemed to lack new and appealing products.

Customers coveted newer and more fashionable brands like On and Hoka.

Meanwhile, Nike’s Air Jordan shoes had been slipping on the resale market last year.

Soon, the company undertook a $2 billion cost-cutting plan, and that included layoffs.

It forecast a surprise drop in fiscal 2025 revenue, which it blamed on inflation taking a toll on demand, and a slower China market.

Analysts say Nike’s new leadership has to repair relationships with retail partners after Donahoe's tenure.

The company had dropped some of those retailers - creating what one analyst called “ill will towards Nike”.

Analysts also say Elliott Hill, who began his career fostering relationships with sporting goods stores to sell Nike products - is a “great pick”.