Let’s be crystal clear about this – I don’t like these Nike management changes. There’s absolutely nothing redeeming about them. I understand that new CEO Donahoe wants to put his mark on the C-Suite. But getting rid of the two people who were passed over for the CEO role (I don’t think they left on their own accord) is a massive waste of talent. Heidi O’Neill is good, but not as good as Elliott Hill (she replaces him as the new President of Consumer and Marketplace). Hill has more buy-in from the rank and file -- and internal respect is everything at Nike. Ditto for Andy Campion…he’s been a capable CFO by any standard (and has been an upside surprise from where I sit), but supplanting Eric Sprunk as COO is a very tall order. New CFO is currently CFO of Operating Segments and Investor Relations – a big leap. Will the company fall apart over this? No. It’ll miss February quarter because of COVID-19 – something it already has a free pass to do. It’ll lower the year for the same reason (~25% of EBIT comes from China). And in the end, it probably won’t miss a beat from an outsider’s perspective. But these are massive waves inside the company. I’m not pulling the plug on this name as a Best Idea – it’s got too much gas in the tank to be derailed by even the mother of all HR changes. But I definitely am less comfortable with management today than I was yesterday. Yes, that’s a one-way ticket to not get invited to the next Analyst Meeting – but I gotta call it like I see it.
Takeaway: This note is a one-way ticket to not get invited to the next analyst meeting, but I think these management changes are terrible.
