Marathon season

Nike laces up

Author

The Axe
September 27, 2024

Good morning, sneaker connoisseurs. This is your Stock Market Rundown for September 27th, 2024. Thanks for starting your day with me. Let’s hit the ground running:

TODAY’S TOP STORY: FOOTWEAR FUTURE

With $51 billion in annual sales, Nike is the world’s biggest athletic gear company. So whoever sits on the Air Jordan throne rules hundreds of miles of shoe-store shelves. Now, that throne is about to get a new king.

Nike veteran Elliott Hill will become the company’s new CEO as of next month. Insiders have praised Hill as a “revered leader” inside the company. And his career trajectory has been pretty nuts—just check out his LInkedIn. 

It showcases how Hill started off at Nike in 1988 as an intern, then scored a string of promotions to sales rep, sales manager, director, and VP… finally climbing all the way to incoming CEO and President. It’s the C-suite version of sweating your way to success.

Nike’s stock price popped when Hill’s appointment was announced, showing investors are ready for a change. Wall Street analysts are applauding Nike for putting a lifer at the helm, and forecasting that he’ll rekindle product innovation.

Why did previous CEO John Donahoe get the boot? Well, when Donohoe took the reins in 2020, he boasted a track record of successful stints running software companies—but no apparel or retail experience. That ended up giving shareholders a bad case of shin splints.

Donahoe made a bet that Nike could find success going direct to consumers. The strategy: cut out the middle man by focusing on Nike-owned stores and online channels. But the move damaged relationships with partners like Foot Locker and JD Sports… who filled the empty space on their shelves with shoes from competitors like Hoka and On Running. 

Plus, let’s face it: when you’re dropping a couple hundred bucks on a fresh pair of Air Zoom Pegasus kicks, buying online just isn’t quite the same as actually trying them on for size. (Remember during back-to-school shopping, when mom would make you walk up and down the aisles to make sure the shoes fit? So embarrassing.)

Did a friend forward this email to you? Sign up here.

SO WHAT ELSE IS GOING ON?

  • Apple shares slumped on weaker-than-expected demand for the  new iPhone 16. My mom had the same beige landline on her kitchen wall for 30 years, but I’m supposed to get excited about a new iPhone because they added a third rear camera?

  • If you’re addicted to DraftKings, you’re not alone. Online sports betting is so popular in Brazil that it’s damaging overall consumer spending as punters blow their paychecks on futbol parlays.

  • Amazon just mandated that workers must return to in-office five days a week, and the minions are in open revolt. Taco Tuesdays in the break room don’t make up for missing those at-home midday two-hour naps.

  • JP Morgan is making moves to reduce dangerous levels of overworking by junior bankers. That is, until the next big M&A deal, when juniors will be expected to once again pull all-nighters fuelled by massive quantities of Red Bull and Adderall.

That’s it for today, diligent analysts. Have yourself a safe and happy weekend, and let’s circle back next week for more blistering insights. Yours in capitalism, The Axe

Thank you so much for reading. If you enjoyed today’s Stock Market Rundown, the #1 thing you can do to help me out is forward it to a friend.