Earlier this year, Nike CEO Elliot Hill visited Barcelona’s iconic Camp Nou soccer stadium, during an extensive renovation. He looked around the scaffolding, cranes, and unfinished sections, and came to a realization. “This is Nike now. We are taking intentional actions that we believe will restore the health and quality of our business, even when those actions create near-term pressures,” Hill said during Nike’s third-quarter earnings call yesterday (March 31).
Just two years into his tenure, Hill is just beginning to implement a broad turnaround plan for Nike. The strategy focuses on making a strong return to sports – especially football – and reversing the lifestyle-focused trend that has dominated recent years. This approach has not yet fully registered in Nike’s earnings: Profits fell 35 percent year over year to $520 million in the December-February quarter, while revenues remained flat at $11.3 billion.
Hill, a 30-year Nike veteran who retired in 2020 and returned last year to lead the company’s comeback, says the transformation is unfolding as planned. He predicted it would be at least two years before Nike’s fortunes began to turn. “This is where we’re tracking now.”
He succeeds former CEO John Donahue, whose focus toward lifestyle franchises and away from core athletic performance saw Nike lose market share to new competitors like Hoka and On Running. Hill’s “Win Now” strategy focuses on eliminating excess inventory and refocusing product lines on performance. These moves impact short-term results, but Hill believes they lay the foundation for a sustainable, sports-driven recovery.
A major bright spot is in play, as sales jumped 20 percent last quarter. Hill said the success puts Nike on the “attack” again and provides a blueprint for other categories, especially soccer. Nike plans to strengthen its global football presence ahead of the 2026 FIFA World Cup by launching new kits and clothing for the association.
In North America, Nike’s focus on mass distribution and sports-based innovation is beginning to pay off. The region, which makes up nearly half of the company’s business, saw sales rise 3 percent to $5 billion. “This is complex work, and parts of it are taking longer than I would like, but the direction is clear,” Hill said.
China tells a different story. Sales there fell 10 percent to $1.6 billion amid increasing competition from local brands, and are expected to decline another 20 percent year-over-year in the current quarter. Other segments, including Converse, are still “early in their comeback,” with the subsidiary reporting revenue of $264 million, down 35 percent.
However, Hill continues to draw inspiration from the transformation that Camp Nou has witnessed. He said: “Camp Nou is not being rebuilt for the next match, but rather it is being rebuilt for the next era.” “That’s exactly how I think about the work we do at Nike.”
