Retailer Office Depot (NYSE:ODP) made the surprise announcement Monday that its chairman and CEO Steve Odland will resign effective Nov. 1, ending a five-year leadership role at the company that has been hurt by the economic slowdown and overall sales weakness.
However shares of Office Depot rose more than 10% after the company also announced preliminary quarterly results that included an unexpected profit.
Odland will be replaced by Neil Austrian, who will serve as the company’s interim chairman and CEO, until the company can find a suitable permanent replacement. Odland will also remain on with Office Depot through the end of the year as a consultant “in order to enable a smooth transition.”
“Now that the worst of the recession is behind us and margins are improving, we believe that this is an appropriate time to seek new leadership to make the most of the platform we have in place, return to sales growth, improve financial performance and reinvigorate our franchise,” Austrian said in a statement.
Austrian, who has been a director with Office Depot for 12 years, has previously been the company’s go-to person in times of leadership transitions. He held the position of interim chairman and CEO previously in mid 2004 during the time the company was looking for new leadership, which eventually led to the hiring of now-outgoing Odland.
“We have successfully led the company through the economic downturn and the external issues,” Odland said in a statement. “I will work with Neil in order to ensure a smooth transition and I look forward to my next chapter.”
Along with the CEO announcement, Office Depot said it expects to report a profit of $54 million in the quarter, or 18 cents per share, compared to last year’s loss of $413 million, or $1.51 per share. Sales increased to $2.9 billion, the company said.
Analysts had been looking for Office Depot to report, on average, a loss of 2 cents per share according to data polled by Thomson Reuters.
Shares of Office Depot jumped 13% on Monday to $5.23. However shares are down 18% so far this year.