A Nike store in Hanoi, Vietnam, July 3, 2025.
Nhac Nguyen | AFP | Getty images
NikeThe recovery plan shows that the first signs of progress, but this “will take some time” for the company to return to profitable growth, said CEO Elliott Hill in an interview with Sara Eisen from CNBC broadcast on Monday.
“When we get to work, we think of three brands, then several sports under each brand, then 190 countries that meet in our four geographies,” said Hill in a seated interview with the company’s head office in Beaverton, Oregon. “Each sport brand, and each country (geography) of the country, they are at different stages of evolution.”
When asked when investors can expect Nike to come back to the growth of revenues with a single figure with strong margins, Hill admitted that “it will take time”. But he said that the company had “the way” to get there.
“It will take a while,” said Hill. “It is not linear. But it is a portfolio, and ultimately, the objective is to make the entire portfolio work to generate income and the profit that we hope to make for all our investors.”
The comments occur almost a year in Hill’s mandate as CEO. Investors are looking for more clarity in the way its strategy to transform the company works while quarterly sales and profits have decreased for a large part of last year.
The difficulties have shown the Nike stock, which dropped approximately 12% in the past year. While Wall Street knows how Hill is planning to repair the business, it is not yet clear how long it will take.
Elliott Hill, CEO of Nike, speaking with CNBC.
CNBC
Since Hill resumed last October, he worked to reverse most of the strategies implemented by his predecessor, former ebay CEO John Donahoe, who tried to sell more shoes and clothes directly to buyers. Instead of focusing on sales only via the Nike website and stores, Hill returns to wholesalers and works to win a shelf space that competitors have taken care of.
During his interview with Eisen, Hill said that Donahoe’s attention on digital sales made sense during the cocoped pandemic, but that changed when the world started to open up.
“When Covid struck, the supply has been limited, demand increases and I think the team did what I think would do. Passing products from digital trade and suddenly it takes off. Double income, double margin and it’s a winning strategy,” said Hill.
“So of course, everything has normalized,” he said. “The physical retail trade began to open up and we continued with this strategy … And I think that over time, it ended up harming the brand because there are a certain set of consumers who want to make the choice, and they want to buy each of the different distribution channels.”
Hill said that the company had made progress towards the user of the shelf it lost. Nike also tries new partners, such as Aritiza, to win new buyers.
Hill also changes the way the company is segmented and returns it to its historic roots. Instead of dividing the business into women, men, men and children, the strategy of Donahoe to stimulate lifestyle sales, Hill rework the structure of the company so that the departments of the company are focused on individual sports.
“They have small interfunctional teams in each of these segments, if you want, business and the idea is that consumers of each of these segments and competition in each of these segments are different and therefore having these small interfunctional teams … This has really helped us to become clear in a few areas,” said Hill.
Under Donahoe, Nike was criticized for lagging behind innovation and the loss of market share, because it was so focused on driving sales of classic styles, such as Air Force 1 and Nike Dunks. Changing the structure of the company is one of the ways in which Hill plans to rekindle innovation, because the teams will focus on the individual needs of different athletes, allowing them to create and deliver better products for these consumers.
Many industry initiates expect Nike to make complete recovery, but larger macroeconomic challenges will make an even more difficult turnover.
When the financial results of last week’s first quarter were published, Nike warned that he is now expecting the prices to cost him $ 1.5 billion during her current financial year, compared to $ 1 billion she scheduled for June. These costs should have an impact on its gross margin of 1.2 percentage points during its current exercise, up compared to the 0.75 percentage points which it originally provided.
Hill told Eisen that the company tried to compensate for the cost of prices based on its suppliers, factories and retail partners. Nike has also recently implemented certain price increases, which could help dull the impact of new tasks.
