CNBC’s Sara Eisen sits down with Nike CEO Elliott Hill to discuss the company’s strategy, culture, and outlook one year into his return.

Nike's CEO reflected on the company's recent challenges, noting that an increased focus on digital commerce during the pandemic led to an imbalance in distribution channels and product offerings. He identified an overemphasis on a few sportswear styles and a lack of channel diversity as factors that hurt the brand.

To address these issues, Nike has reorganized its structure to focus on sport-specific teams across its brands, including Nike, Jordan, and Converse. The CEO emphasized a renewed commitment to putting athletes at the center of the company's mission, fostering innovation, and strengthening the company's culture. This approach aims to deliver more innovative products and targeted storytelling, while balancing digital, wholesale, and physical retail channels.

Nike CEO: We're putting the athlete at the center of everything we do

So here you are, it's been almost a year and you've had a year to really dig in and sift through the issues because you came to turn it around. So what's your diagnosis of what went wrong? Well, I've tried not to look backwards. I've tried to snap the chalk line and move forward. But if I had to, I think I'm going to oversimplify it. I think when COVID hit, supply got constrained, demand goes up. And I think the team did what I think anybody would do. You shift product over to digital commerce and all of a sudden that takes off. It's double revenue, double margin, and it's a winning strategy. And then, of course, everything normalized. Physical retail started to open back up and we continued on with that strategy. And so continue to invest in Nike direct digital commerce. And I think over time it ended up hurting the brand because there's a certain set of consumers that want to shop choice and they want to shop across each of the different channels of distribution. And so when I came back, that was one thing. And then the other one was also maybe spending too much focus on three sportswear styles that I think we ended up putting too much revenue behind those three sportswear styles. So now you're you're fixing it. You're cleaning up. We've also talked about culture and the unique culture of Nike and what you're doing to sort of bring things in a different direction. My first day on the job, which was October 14th, I stood up on stage and my first slide had two images and two statements. We're a sport company and we're a growth company and we're not you know, they're not mutually exclusive. When we grow sport, we grow the overall marketplace. And when we grow the overall marketplace, I like our chances of growing. And I got a it was a loud clap because, hey, we're going back to sport. We're going to put the athlete back at the center of everything that we do. And I think that's really helped from a cultural perspective, anchoring and centering us back on sport. But in addition to that, I started really spending time on our mission statement, our sense of purpose. Why do we come to the office every single day? It's this idea of inspiration and innovation for every athlete in the world. And then I also started we reintroduced our maxims, what we what we believe in and how we behave. And I think all of those coupled together have really helped to lift and accelerate the culture moving forward. What does that mean that you're going to put sport at the forefront of everything you do? Because people think of Nike at that. That's how it's always been. What are you doing differently there? Let me. So I think the easiest way to think about we have three brands. Nike, Jordan and Converse. And we reorganize just early September. We reorganize each brand by sport. So think Nike running Nike basketball, Nike training, et cetera. We have small cross-functional teams and each of those segments, if you will, a business. And the idea is that the consumers in each of those segments and the competition in each of those segments is different. And so by having these small cross-functional teams, they come to work every single day. The Nike running team does. And they're there to serve the running athlete and every decision they make, whether it's an innovation story or whether it's a distribution decision or if it's a marketing story, it all anchors on what do we need to do to be separate? And we while we were organized by men's women's kids. So but and we've lost the sharpness of sport with men being the primary women's being the primary and kids being the primary. And so we flipped it. So it's it's Nike running Nike basketball, et cetera. And then Jordan, the same thing. Jordan basketball, Jordan golf. And so these small cross-functional teams focused on a different consumer segment. And that's really helped us get sharp in a couple of areas. Number one, innovative product. I think we had lost some of that. Yeah. So we're getting sharper on product and we're wearing some here. So there are premiums and you had a good quarter with running. I know we had a great quarter with running. And so we're getting sharper on innovative product, emotional, inspiring storytelling, and we're paying it off in an integrated, elevated marketplace, not just Nike Direct, but also wholesale, digital and physical as well. So it and all each of those teams. Yeah, that's what they come to work every single day. Product, storytelling, marketplace.

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