Disney CFO’s surprise exit ‘adds yet another wrinkle’ amid Bob Iger restructuring

In another surprise management shake-up, Disney (DIS) Chief Financial Officer Christine McCarthy will step down from her longtime role due to family medical leave, the company said in a statement late Thursday.

The departure will likely bring further headwinds for CEO Bob Iger as he attempts to restructure the media giant ahead of its exit in less than two years.

“Christine McCarthy is one of America’s most admired financial executives, and her impact on The Walt Disney Company over 23 years of dedicated service cannot be overstated,” Iger said in the statement.

McCarthy, a close confidant of Iger who served as Disney’s chief financial officer for eight years, will be replaced by Kevin Lansberry, executive vice president and chief financial officer of Disney Parks, Experiences and Products, effective July 1.

Lansberry will serve as interim chief financial officer until a full-time replacement is found. McCarthy will remain on the management team as a strategic advisor and will assist in the process of identifying and onboarding a long-term successor “to ensure a smooth and successful transition,” Disney said.

“I look forward to helping with the transition and will always be rooted for the success of my extended Disney family, who have shown time and time again that determination, teamwork and the pursuit of excellence are a combination. unstoppable,” McCarthy said.

    Christine McCarthy, Senior Executive Vice President and Chief Financial Officer of The Walt Disney Company, participates in a panel discussion during the Milken Institute's annual global conference at the Beverly Hilton Hotel on April 29, 2019 in Beverly Hills, California.  (Photo by Michael Kovac/Getty Images)

Christine McCarthy, chief financial officer of The Walt Disney Company, is stepping down, the company announced. (Michael Kovac/Getty Images)

Wells Fargo analyst Steve Cahall said Lansberry faces a series of uphill battles heading into the second half of 2023, including slower fleet growth due to inflation, a murky timeline for direct-to-consumer (DTC) margin improvement — the biggest problem, in Cahall’s view — besides the purchase of Hulu’s minority stake and the impact of the takeover. ESPN completely above.

“Separately, they are speed bumps for stock. Together, they are roadblocks,” he wrote in a new note to clients on Friday.

Disney will release its third quarter results in August. Cahall anticipates limited long-term guidance and expects McCarthy and Lansberry to speak on the earnings call.

Overall, the analyst, who has a price target of $147 on the stock, said Disney is an above-average opportunity but also presents above-average risk relative to “the simpler story” from Netflix.

“The CFO transition adds yet another wrinkle,” he said. “This will be followed by a CEO transition within 1-2 years, while ESPN and DTC present discrete operational challenges. We believe this is an opportunity for this type of upside on such a large-cap stock. , but it will undoubtedly take time for the pieces to come together.”

Iger, who took over as CEO in November, has remained hyper-focused on profitability as investors shift away from subscriber growth and focus more on margins.

The executive worked to establish new revenue streams like Disney’s recently launched ad-supported tier, in addition to various price increases to help reduce losses and increase metrics like average revenue per user, or ARPU. He reaffirmed the company’s outlook to achieve streaming profitability by 2024.

Disney, which reiterated plans to cut costs by $5.5 billion, including $3 billion in content costs, announced an effort to cut 7,000 jobs in February. Disney experienced its first round of layoffs in late March. His second and biggest round came at the end of April and a third took place last month.

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