What happened?
A new executive will take the wheel at Advance Auto Parts (AAP 1.53%) in the very near future. The company named a new CEO, Thomas Greco, who will formally take the position on April 11. Greco replaces interim CEO George Sherman, who will continue as the company's president.
IMAGE SOURCE: MIKE MOZART VIA FLICKR.
Advance Auto Parts' incoming leader previously worked for 30 years at beverage and snack food giant PepsiCo (PEP 0.78%). In his most recent role, he was CEO of its Frito-Lay North America snack division.
In the press release announcing the appointment, Advance Auto Parts quoted its executive chairman, Jack Brouillard, saying that Greco is "an exceptional leader and operator with a proven track record of designing and executing winning strategies, driving profitable growth, and building an exceptional talent base."
As CEO, Greco will receive an annual base salary of $1.1 million, and will be eligible for the company's incentive bonus plan.
Does it matter?
Plucking a new CEO from the ranks of PepsiCo to run an operator of car-parts stores might seem like an odd move. But like the food and drink purveyor, Advance Auto Parts is a customer-facing company that has to operate in a competitive business against determined rivals both large and small. It's a job that demands a seasoned executive used to fighting for market share, and that's what the company appears to have landed in Greco. I think the news of his appointment will be taken positively by shareholders.
The new boss will certainly not have an easy job. Advance Auto Parts' same-store sales growth turned negative in 2015, in contrast to better-performing rivals like AutoZone. Sales were down slightly in the quarter compared to the same period one year ago, while net profit declined by 35%. Meanwhile, activist investor Starboard Value has agitated for the company to find ways to improve profitability.
