In what many observers are calling a surprise move, the top financial executive at Disney (DIS) is leaving the entertainment giant.
Disney said that Chief Financial Officer Christine McCarthy is "taking a family medical leave of absence."
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Kevin Lansberry, currently executive vice president and chief financial officer of Disney Parks, Experiences and Products, will step in as interim CFO starting July 1. McCarthy will serve as a strategic adviser through June 2024.
“Christine McCarthy is one of the most admired financial executives in America, and her impact on The Walt Disney Company during 23 years of dedicated service cannot be overstated,” CEO Bob Iger said in a statement.
Executive 'Key Strategic Anchor'
Iger, who has he will stay with Disney through December 2024, stated that McCarthy “has served as a key strategic anchor during a period of great transformation, and she and I have discussed her desire to ensure an orderly and successful CFO succession in advance of the company’s transition to its next chief executive officer.”
"Although I am leaving the CFO role, I look forward to helping with the transition and will always be rooting for the success of my extended Disney family, who have shown time and again that determination, teamwork and the pursuit of excellence are an unstoppable combination,” McCarthy said.
McCarthy has an ailing husband, who has been in a healthcare facility since the start of the year, the Wall Street Journal reported.
Her abrupt exit caught some colleagues and associates by surprise, with one person telling the Journal that there have been no dramatic changes in her life recently that would require her to step back.
McCarthy, who battled cancer twice, has clashed with Iger and other top executives over strategy, including the amount of money Disney spends on content and a recent restructuring that she felt didn’t go far enough to streamline the company, the Journal said, citing a person familiar with the matter.
Wells Fargo analyst Steve Cahall, who has an overweight rating on Disney shares with a $147 price target, said the announcement "adds another wrinkle to an already complex story."
However, he added that the development could present "a deck-clearing" opportunity for direct-to-consumer (DTC) guidance come September.
"McCarthy has been CFO for 8 years and is regarded as a close confidant of Bob Iger, a straight shooter with the sellside/buyside and a strong operator for the upcoming focus on DTC margin improvement," he said in a research note, adding that Lansberry "is not yet well known by Wall Street."
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Cahall noted that Disney is contending with a softening of parks growth due to inflation, the timing and outlook for DTC margin improvements, which he considers the biggest issue, as well as the purchase of Hulu's minority stake and the impact of taking ESPN fully over-the-top.
"The CFO transition adds yet another wrinkle," Cahall said. "It will be followed by a CEO transition within another 1-2 years, while ESPN and DTC present discrete operational challenges."
"We think it's an opportunity for this kind of upside on such a large-cap stock, but no doubt it will take time for the pieces to come together," he added.
Disney is also locked in a battle with Florida Gov. Ron DeSantis after former Disney CEO Bob Chapek took a public stand on the Republican presidential candidate's so-called "Don't say gay" legislation.
