Who Are The Executives?

Let's talk about CEO John Donahoe

John started off as a consultant, working for Bain & Co, where he rose up to CEO by 1999 and was in that role until 2005. Nike was one of his clients at Bain. He then went to ebay from 2005 to 2015, which I don’t view as a good move, the stock went down and barely broke even by the time he left, meanwhile Amazon grew into a worldclass business. He then went to ServiceNow, which also had mixed results.

He’s a smooth talker, but honestly, I think as an operator, he’s had mixed results. I think he’s jumped around industries a bit too much. I do have some bias here, I generally don’t like management consultants. But neither due Buffett or Munger. Charlie has a famous quote where he says he’d rather throw a viper down his coat than hire a consultant. He was referring to compensation consultants, but the feeling is similar for management consultants

In sum: I don't think John Donahoe is the guy to lead the Nike turnaround. I am sure if I met him, he'd probably change my mind due to his extreme charm.

update 2.20.25:

[disclosure - new shareholder as of 2.19.25]

Elliott Hill has taken the helm at Nike, and I couldn't be more excited about it. He started his career as an intern at Nike in 1988.

He has worked in 19 different roles in the business.

Perhaps the only person who knows Nike better in the world is Phil Knight

His plan for growth:

1. Emphasizing Sport and Innovation

Hill aims to put "sport back at the center of everything" at Nike. He believes the company had lost its obsession with sport and plans to refocus on athletes and performance. This includes creating innovative, "must-have" products that solve unmet needs.

2. Improving Product Offerings

Hill is committed to driving innovation and designing technical products that look great. He plans to launch new products like the Peg 41 and Air Max DN, while scaling innovation and newness

3. Deepening Consumer Connections

A crucial part of Hill's strategy is building deep personal consumer connections with Nike's brands. This involves delivering compelling consumer experiences through digital platforms and retail.

4. Revamping Marketing Approach

Hill plans to invest more in marketing and brand storytelling. Nike will become more aggressive with sports-related marketing while eliminating discounts for online sales.

5. Restoring Full-Price Model

To combat excessive discounting, Hill aims to return Nike's online business to a full-price model. This involves aggressively liquidating old inventory through less profitable channels in the short term.

6. Strengthening Partnerships

Hill is committed to mending relationships with wholesale partners and supporting their profitability. He believes Nike will win when its partners win. This could not be more proven by the company's recent brand deal with Kim Kardashian!

7. Focusing on Sustainable Growth

Hill's strategy emphasizes achieving sustainable, profitable long-term revenue growth. This includes prioritizing EBIT and strategic supply management to strengthen Nike's market position.

8. Embracing Omnichannel Distribution

The growth strategy includes omnichannel distribution via highly productive stores and e-commerce sites. Hill plans to integrate online platforms with physical stores to enhance the consumer experience.