👟 Where Does Nike Go From Here?

Good morning. US stock futures fell in Friday morning trading as the broad market indices closed at record highs recently.

👟 Sneaker giant shakes things up at the top

📝 Our report: Nike just announced that CEO John Donahoe is stepping down, and in a plot twist, longtime company vet Elliott Hill is dusting off his sneakers and coming out of retirement to lead the brand once again. Donahoe, who has been Nike’s CEO since Jan. 2020, will retire from his position on Oct. 13. Hill is slated to take over on the following day. Donahoe will stay on as an advisor through the end of January.

 🔑 Key points:

• Nike is in the midst of a broader restructuring after it shifted its strategy to sell directly to consumers.

• Critics say in the process of building out sales at Nike’s own stores and website, it lost sight of innovation and failed to churn out the types of groundbreaking sneakers the company was known for.

• Under Donahoe’s tenure, Nike grew annual sales from $39.1 billion in fiscal 2019 to $51.4 billion in fiscal 2024. During Covid, online sales were booming and the strategy to transform Nike from a brand into a retailer seemed to be working — until the pandemic started to end.

💡 So what: Nike's CEO change comes at a pivotal time for the company. A leadership transition, especially with John Donahoe stepping down and Elliott Hill returning, signals potential shifts in strategy or focus. Donahoe has been guiding Nike through digital transformation and growth, while Hill, with deep experience in Nike’s brand and consumer strategies, could bring a renewed focus on the core of Nike’s business: brand storytelling, innovation, and connecting with consumers. This move might aim to reinforce Nike's competitive edge, recalibrate its priorities, or strengthen the company’s resilience during global market challenges.

Friday - No Major Economic News

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🎥 Theater chains to spend billions in upgrades

WHAT: Your next movie night might come with an upgraded seat and sound system! The biggest theater chains—AMC, Regal, and Cinemark—are getting ready to splash over $2.2 billion on some serious theater makeovers across the U.S. and Canada over the next three years, according to an industry group.

WHY: Improvements will be made by the eight biggest theater chains in the region, representing over 21,000 screens and 67% of box office sales, according to the National Association of Theatre Owners. The movie business has faced multiple challenges from the rise of streaming to the COVID-19 pandemic and the Hollywood strikes in 2023.

🍝 Olive Garden, Uber form delivery partnership

WHAT: Olive Garden is diving into the delivery game for the first time, teaming up with Uber to bring those breadsticks straight to your door! Darden Restaurants, which owns Olive Garden and other chains like LongHorn Steakhouse, says Olive Garden will lead the charge, rolling out third-party delivery later this year.

WHY: The move is a reversal for Orlando, Florida-based Darden, which has long delivered large catering orders itself but has resisted third-party delivery for individual orders in the past. In 2018, Darden’s then-President and CEO Gene Lee said the company was testing third-party delivery but was skeptical.

🐭 Disney turns back on Slack

WHAT: Seems the Mouse House is rethinking its chat platform after getting a little too much unwanted attention! Walt Disney is reportedly pulling the plug on Slack as its go-to collaboration tool after hackers leaked over a terabyte of company data, according to the Wall Street Journal. Disney's CFO Hugh Johnston said most of the media and entertainment company's businesses would stop using the service later this year, the report said.

WHY: Hacking group NullBulge had published data from thousands of Slack channels at the entertainment giant, including computer code and details about unreleased projects, the Journal reported in July.

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