Lowe’s Co. said Chief Executive Robert Niblock will retire after 25 years at the company, potentially giving an activist investor even more influence over the future of the home-improvement retailer.
The announcement comes one week after three new directors joined the company’s board following assertions from activist investor D.E. Shaw & Co. that Lowe’s had underperformed in recent years compared with rival Home Depot Inc.
Mr. Niblock, who has held the CEO role for 13 years, will remain in place until a successor is found, the company said Monday. David Batchelder, a new Lowe’s board member and former director at Home Depot, is chairing the committee responsible for finding a replacement.
The next chief most likely will be an external candidate, said Craig Johnson, president of investment-research firm Customer Growth Partners.
“This is not a succession plan,” he said, noting the company has lost several senior leaders in recent years. “Basically there are no candidates.”
Fresh leadership could put the company on track to be more competitive, Mr. Johnson said, noting that Home Depot’s stock has more than quadrupled since the ouster of former CEO Robert Nardelli in 2007. However, he said, without a smooth transition, the company’s short-term goals could be in jeopardy.
Quentin Koffey, a D.E. Shaw portfolio manager, commended Mr. Niblock for his career with Lowe’s, adding that “Robert leaves Lowe’s in excellent condition to execute on the tremendous value creation opportunities ahead of the company.”
A Lowe’s spokeswoman said the company expects an orderly transition and an efficient search process. The company said it wouldn’t comment on the candidates being considered.
The Mooresville, N.C., company in February reported falling sales and lower-than-expected earnings in its fourth quarter. However Lowe’s said its same-store sales growth beat internal forecasts for the period.
Lowe’s executives have been discussing ways to boost revenue and improve customer results both in stores and online. The company has sought to improve profitability by streamlining its supply chain and inventory management. Still, Lowe’s share-price growth has lagged behind that of its larger rival, Home Depot, over the past year.
Lowe’s shares rose 5.5% to $88.32 in afternoon trading. The stock has fallen 4.9% so far this year, while the S&P 500 has declined 1.9%.
—David Benoit contributed to this article
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