Advance Auto Parts Inc. (NYSE:AAP) shares dropped as much as 14% after the company announced that its CEO would be retiring. The announcement comes after the company reported disappointing third quarter results.
Excluding some items, earnings per share were just $1.95 in the quarter. Analysts were expecting $2.09 on average.
After leading the company for eight years, Darren Jackson, CEO, announced that he will be stepping down on January 2. George Sherman, president of the company, will succeed Jackson on an interim basis. Sherman and other external candidates will be considered for the permanent position.
Advance Auto Parts has been under increased pressure from activist investor Starboard Value since September after disclosing a 3.7% interest in the auto-parts chain. The retailer announced a truce with Starboard by bringing the firm’s CEO onto its board. Two independent directors will also be chosen by the fund as soon as possible.
After the announcement, Advance Auto’s stock dropped to as low as $168.37, its biggest intraday drop in over two months. Through Wednesday, the company’s shares had gained 22% on the year.
As per an agreement between the auto parts retailer and Starboard, Starboard will vote the entirety of its shares in favor of Advance Auto’s nominees at its annual meeting in 2016.