changes and winning back market share lost to competitors that filled shelves left by Nike’s vacancy,” said Amanda O’Neill, consumer products director at S&P Global Ratings.  “Specifically, Nike has lost its footing in the specialty running category, specifically losing market share to newer entrants Hoka and On Running, and legacy competitors Adidas and New Balance have retained their positions in the lifestyle category.” Hill started his career at Nike in 1988 as an intern and subsequently progressed through various roles within the organisation. Throughout his tenure at Nike, he held senior leadership positions across Europe and North America.  Before retiring in 2020, he was president of consumer and marketplace leading all commercial and marketing operations for Nike and Jordan Brand, including the profit and loss management across the company’s four geographies.  Mounting challenges  The executive transition was announced shortly before Nike released its latest quarterly results in September. The US sportswear giant reported a 10 per cent year-over-year decline in sales for the quarter ending August 31, with revenue totalling US$11.6 billion. Additionally, net income decreased by 28 per cent to US$1.1 billion. The company withdrew its full-year guidance to “provide Hill with the flexibility to reconnect with the employees and teams and evaluate the current strategies and business trends”.  S&P Global Ratings projected Nike’s sales to decline approximately 5 per cent in fiscal 2025.  “The announcement comes on the heels of strategic changes to launch more innovative products and pull back sales on large franchises such as Airforce 1, Air Jordan 1, and Dunks,” said O’Neill, consumer products director at S&P Global Ratings.  Paul Trussell, VP of corporate finance and treasurer at Nike, said revenue from these franchises decelerated in Q1, declining more than the total business as the company tightened market supply. The company expects this trend to continue tempering its reported revenue over the coming seasons.  Under Donahoe’s helm, the CEO bolstered DTC sales channels, shifting away from wholesale partners. However, the result was underwhelming.  “The company is reverting to an omnichannel approach and rebuilding relationships with retailers it pulled away from in recent years when it targeted 50 per cent of sales from its direct-to-consumer business, which includes owned applications,” O’Neill said.   Meanwhile, emerging players including Hoka and On Running are gaining market share. On Running’s net sales jumped 27 per cent during the quarter ended June 30. The company reiterated its full-year expectation of at least 30 per cent net sales growth on a constant currency basis.  According to GlobalData MD Neil Saunders, smaller rival brands have successfully connected with consumers with their creativity and inventiveness, in a way that Nike has failed to do. He believes the company has identified many of its problems but is not likely to come up with quick solutions. “The company is too big and cumbersome, and the issues too deeply engrained, to enact a quick turnaround. This leaves Nike facing a year of poor performance with only a promise of better things to come,” Saunders added.  “The sneaker behemoth announced pushing-forward innovations in lines such as Pegasus to help reignite growth. Still, Nike’s credit metrics remain strong with leverage under 1x, giving it some runway to execute its new strategy,” O’Neill said.