Shares of Best Buy (BBY) fell as much as 6% in morning trading Tuesday as shareholders reacted to news that the consumer electronics giant is losing its chief financial and chief administrative officer, Sharon McCollam.
McCollam's looming departure raises new concerns among analysts, outweighing a substantial earnings beat for the electronics retailer before the opening bell, in which earnings per share of $0.44 for the first quarter topped forecasts by more than 25%. Meanwhile sales of $8.4 billion beat forecasts by nearly 2%.
"While encouraged that BBY is undertaking a seemingly thoughtful management succession plan, we are concerned that the market could over time look more skeptically upon its prospects without Sharon at the helm," Oppenheimer analysts said in a morning report. Oppenheimer reiterated their Perform rating on Best Buy, which was lowered from Buy in February.
Meanwhile, KeyBanc Capital Markets analyst Bradley Thomas said in a Tuesday report that McCollam is "one of the most highly respected executives in retailing today," noting the company also posted lower-than-expected earnings guidance for the second quarter of $0.38-$0.42 per share, down from $0.49 year over year and below $0.50 consensus estimates.
McCollam joined Best Buy in 2012, after serving as chief operating officer at Williams-Sonoma (WSM), and will remain CFO at Best Buy until the June 14 shareholder meeting. She will remain an advisor through the rest of 2016. She is set to be replaced as CFO by Chief Strategic Growth Officer Corie Barry, a 16-year Best Buy veteran.