Nike Chief Executive Elliott Hill presented a plan to recover the company after a reported decline in revenue and profit due to heavy promotions and a lack of product innovation.
Hill, a Nike veteran who returned as CEO in October, underlined refocusing on "sport" as the brand's core identity and improving relationships with wholesale partners. Aggressive clearance of old inventory through discount channels and then return to selling at full price to protect the brand value.
According to CNBC, Hill recognized that reliance on promotional activity had dented Nike's profitability and market reputation. He was highly critical of strategies, for example, in online retailing and cutting off relationships with wholesalers such as Foot Locker and Dick's Sporting Goods, which he pledged to repair. Hill emphasized that mutually beneficial relationships have to be nurtured over time for success to last.
Nike Sales Declined Due to Competition
Sales for the fiscal quarter ending November 30 declined 8% year-over-year, as North America, Europe, and China posted declines. Nike topped Wall Street's expectations for earnings per share and total revenue, but the gross margins suffered due to steep markdowns and flat inventory levels, per Businesswire.
Hill is looking to simplify the product mix and cut back supply on the over-saturated sneaker models, such as Air Force 1s and Air Jordans. By re-shifting Nike's focus on athletes and performance, Hill hopes to regain market share lost to competitors such as Asics and Hoka.
One of the company's recent wins is securing a renewed uniform contract with the NFL through 2038, reinforcing Nike's standing as the exclusive uniform provider for major US sports leagues.
Despite setbacks, Hill expressed confidence in turning the brand around as he prioritizes long-term brand health over short-term gains.
Join the Conversation