Nike CEO John Donahoe is out, replaced by company veteran Elliott Hill

Nike on Thursday announced that its CEO John Donahoe is stepping down and company veteran Elliott Hill is coming out of retirement to take the helm of the sneaker giant.

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.

Shares climbed 8% in extended trading Thursday. As of the close, shares are down more than 25% this year.

"I am excited to welcome Elliott back to Nike. Given our needs for the future, the past performance of the business, and after conducting a thoughtful succession process, the Board concluded it was clear Elliott's global expertise, leadership style, and deep understanding of our industry and partners, paired with his passion for sport, our brands, products, consumers, athletes, and employees, make him the right person to lead Nike's next stage of growth," said Mark Parker, Nike's executive chairman.

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.

In late June when it reported fiscal fourth quarter results, Nike warned that it was expected sales to drop 10% during its current quarter, citing soft demand in China and "uneven" consumer trends across the globe.

The outlook was far worse than the 3.2% decline that analysts had expected. 

Following the rough report, Nike had its worst trading day in history and some analysts speculated that Donahoe would soon be pushed out in favor of a new CEO. At the