What happened

Grocery Outlet Holding (GO 2.29%) may have topped last quarter's sales and earnings estimates and upped its full-year guidance. But news that CEO Eric Lindberg will be stepping down at the end of the year is upending the stock. Shares of the discount grocery store chain are down 10.1% as of 12:08 p.m. ET on Wednesday.

So what

For the three-month stretch ending in early October, Grocery Outlet Holding turned $918.2 million worth of sales into per-share profits of $0.27. Earnings were up from the year-ago comp of $0.24, while the top line grew 19.4% from the company's third-quarter 2021 sales of $768.9 million. Both figures beat Wall Street's estimates, as did Grocery Outlet Holding's revised outlook. The company's previous 2022 revenue guidance range from $3.46 billion to $3.48 billion is raised and tightened to a singular figure of $3.55 billion, while its profit outlook of between $0.97 and $1 per share is now just $1 per share.

Perhaps most notably, same-store sales growth guidance of 8% to 8.5% was upped to 11% following last quarter's same-store sales growth of 15.4%

A key driver of this strong growth, however, is being taken out of the picture. CEO Eric Lindberg -- who has been at the helm for the past 17 years -- will be leaving this role at the beginning of the coming year to take over as chairman of the board. Investors may be concerned the exit of such a long-tenured leader could mean an end to the company's impressive streak of growth-driving store openings.

Now what

It's a legitimate concern, too. Chief executives that lead a company for this long often become a crucial fixture of the organization. Lindberg's exit will certainly be at least somewhat disruptive.

Grocery Outlet Holding is being left in good hands with its current president, RJ Sheedy, however, who has been with the company for a decade and in the grocery industry for over 20 years. He likely has a good understanding of what makes this organization's independently operated grocery store approach work so well in such a competitive environment.

In light of this reality paired with today's 10% tumble (driving shares to more than 30% below August's peak), Wednesday's drop is a great entry point for the stock. The shock reaction isn't apt to last long. Indeed, it may be the capitulation many investors have been waiting for.