Shares of Office Depot (NASDAQ:ODP) fell more than 13% on Friday morning before recovering somewhat on news that its chief financial officer was leaving to assume a similar position at another company. The move is to a larger company and provides no reason to believe there is trouble at Office Depot, but the market hates uncertainty and investors are seemingly taking profits after a strong run in recent months.
In a statement, Office Depot said that its executive vice president and CFO, Joseph T. Lower, would leave effective Jan. 10, 2020, to assume the role of CFO at AutoNation (NYSE:AN). A search is underway for his replacement, and CEO Gerry Smith said that the company has the infrastructure in place to handle the departure.
"We are grateful to Joe for his leadership over the past two years in advancing our transformation efforts and wish him every success in the future," Smith said. "Joe is supported by an outstanding finance organization that will continue to serve the company and its shareholders well."
There are logical reasons for the move. Lower will be going to a company four times Office Depot's size in terms of market capitalization, and with Office Depot headquartered in Boca Raton, Florida, and AutoNation based just down the road in Fort Lauderdale, he will not have to contend with a long-distance relocation.
But the market does not like change and will be disappointed to see the departure of one of the architects of Office Depot's plan to combat intense competition from e-commerce vendors and larger, more diversified retailers.
Office Depot shares had been up more than 60% over the past three months prior to Friday's announcement, fueled by declining anxiety that the U.S. is headed for a recession and recent quarterly results that showed margin improvement. But the company's shares are still down more than 50% over the past three years.
Office Depot faces a challenging future in which it's trying to compete against retail giants -- such as Amazon.com and Target -- that are increasingly trying to move in on their core business clientele. Now, the company needs a new CFO to help guide that strategy to compete.