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 its 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 time, Nike co-founder Phil Knight said the company was standing by Donahoe’s side and the executive had his “unwavering confidence and full support.”

But on Thursday, Knight said in a statement that he is excited to welcome Hill back to the team.

“Leadership changes are never easy, they test you, they challenge you, but this transition has been handled with remarkable thoughtfulness and an unwavering commitment to Nike,” said Knight. “Looking forward, I couldn’t be more excited to welcome Elliott back to the team. His experience, understanding of Nike and leadership is exactly what’s needed at this moment. We’ve got a lot of work to do but I’m looking forward to seeing Nike back on its pace.”

In a statement, Donahoe said it “became clear that now was the time to make a leadership change.”

“Elliott is the right person. I look forward to seeing Nike and Elliott’s future successes,” he said.

Hill started at Nike as an intern in the 1980s before working his way up to president of the company’s consumer and marketplace division where he was resposible for leading all commercial and marketing operations for Nike and Jordan Brand. He retired in 2020 after 32 years with Nike.

“Nike has always been a core part of who I am, and I’m ready to help lead it to an even brighter future,” Hill said in a statement. “I’m eager to reconnect with the many employees and trusted partners I’ve worked with over the years, and just as excited to build new, impactful relationships that will move us ahead. Together with our talented teams, I look forwardkk to delivering bold, innovative products, that set us apart in the marketplace and captivate consumers for years to come.  CNBC News