Nike CEO John Donahoe has been replaced by company veteran Elliott Hill.

• Nike CEO John Donahoe is stepping down and Elliott Hill is coming back to succeed him.
• Donahoe will resign on Oct. 13 but will continue to serve as an advisor until the end of January.
• Hill worked at Nike for 32 years before retiring in 2020.

On Thursday, it was announced that John Donahoe, the CEO of the sneaker giant, is stepping down and Elliott Hill, a company veteran who retired, will take over as the new CEO.

Donahoe, who has been Nike's CEO since January 2020, will retire on October 13. Hill will assume the role on October 14. Donahoe will continue as an advisor until the end of January.

Despite climbing 8% in extended trading Thursday, shares are still down more than 25% this year.

Mark Parker, Nike's executive chairman, stated that Elliott's global expertise, leadership style, and deep understanding of the industry and partners, combined with his passion for sport, our brands, products, consumers, athletes, and employees, make him the ideal candidate to lead Nike's next stage of growth.

Nike is currently undergoing a broader restructuring following its shift in strategy to focus on direct-to-consumer sales. However, critics argue that in the process of expanding its sales through its own stores and website, Nike lost sight of innovation and failed to produce the revolutionary sneakers that made it famous.

Nike predicted a 10% drop in sales during its current quarter due to soft demand in China and "uneven" consumer trends worldwide, as reported in late June when it released its fiscal fourth quarter results.

The outlook was significantly worse than the 3.2% decline that analysts had predicted.

Nike experienced its worst trading day in history, prompting speculation that CEO John Donahoe would be replaced with a new leader. However, at the time, co-founder Phil Knight publicly supported Donahoe and expressed his confidence in the executive's leadership.

On Thursday, Knight expressed his excitement about welcoming Hill back to the team in a statement.

"Knight stated that leadership changes are always challenging, but the transition at Nike has been handled with great care and dedication. He expressed excitement about welcoming Elliott back to the team, as his experience and leadership skills align perfectly with Nike's current needs. Despite the work ahead, Knight is optimistic about Nike's future and looks forward to seeing it regain its momentum."

Donahoe stated that it was clear that the time had come for a leadership change.

"Elliott is the ideal individual. I eagerly anticipate witnessing the achievements of Nike and Elliott in the future," he stated.

In the 1980s, Hill, who is currently based in Austin, began his career at Nike as an intern and first became interested in the company after writing a paper about it for his marketing class in graduate school, as he stated in a 2020 interview.

For 32 years, Hill progressed through the ranks and eventually became head of the consumer and marketplace division at the company, overseeing commercial and marketing operations for Nike and Jordan Brand. He was highly respected among employees and retired in 2020, according to sources close to CNBC.

"Hill stated that Nike has always been a significant aspect of his identity and he is prepared to guide it towards a brighter future. He is eager to reconnect with longtime employees and partners and establish new, impactful relationships to propel the company forward. With the help of his talented teams, Hill looks forward to creating groundbreaking products that will distinguish Nike in the market and captivate consumers for years to come."

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