Shares of Lowe's Companies Inc. (NYSE:LOW) were moving higher today after CEO Robert Niblock announced his retirement from the home-improvement retailer. Niblock will continue as CEO while the company searches for its next leader. Despite the stock's strong performance under Niblock, shares climbed today as investors seemed to think that a new leader could unlock faster growth. As of 11:14 a.m. EDT, the Lowe's shares were up 5.5%.
During his 13-year tenure as CEO, Niblock guided the stock through the housing crisis to gains of more than 200%, easily outperforming the S&P 500. However, Lowe's consistently underperformed its larger rival, Home Depot (NYSE:LOW), which seemed to be a source of investor frustration and cause for the stock's gains today.
Investors seem to believe that Lowe's strong performance is due primarily to the booming housing market and not to any particular strategy on the part of Niblock. Home Depot has consistently put up better comparable sales and earnings growth than its chief competitor. Unlike Lowe's, Home Depot has resisted opening new stores, investing instead in store improvements, e-commerce, and share buybacks.
With the new CEO still to be named, Lowe's succession path is unclear. Lead director Marshall Larsen said of Niblock, "Under his guidance and stewardship, Lowe's has built a strong foundation for growth, and today the company is well positioned as a leader in home improvement with the right strategy in place to drive innovation, accelerate sales growth and enhance profitability."
Keep your eye out for an announcement on the next CEO in the coming months. Investors clearly believe there's room for improvement.