One would think that with first-quarter net income jumping more than 77% to $229 million, Best Buy shares would be flying high.
This was not the case on Tuesday. Despite such an impressive first quarter improvement in net income and beating projections, the electronic retailer had announced the departure of its chief financial officer and also warned of a slight hit in the second quarter.
Revenue for the company fell 1.3% to $8.4 billion in the quarter ended May 2. This came in ahead of S&P Global Market Intelligence estimates of $8.3 billion.
Earnings per share, including discontinued operations, rose from 37 cents a year ago to 71 cents. This too came in ahead and beat S&P Global Market Intelligence expectations of 35 cents.
The company’s CFO, Sharon McCollam, will relinquish the role on June 14. She will remain as an adviser until Jan. 28. Chief strategic growth officer Corie Barry will then become CFO, and the chief administrative officer duties will be split up.
Barry’s job will be filled by Asheesh Saksena, former executive vice president of strategy and new business development for Cox Communications.
So why is McCollam’s departure resulting in such a hit for the stock? It could present a particular risk to Best Buy’s future as she was behind efforts to improve and integrate the chain’s customer service and online operations.
Investors took this news hard as shares of Best Buy were down nearly 10% in Tuesday morning trading.