Two companies shared notable stories after market close on Thursday, sending their share prices in opposite directions. Wells Fargo (NYSE:WFC) said its CEO Tim Sloan is immediately stepping down from his role at the helm of the company and is leaving the bank entirely this summer. Meanwhile, RH (NYSE:RH), a home-furnishing retailer, reported worse-than-expected fourth-quarter revenue and lowered its full-year outlook.
Here's a look at each of these stories and why their stocks are moving.
Wells Fargo loses its CEO
On March 28, Sloan informed Wells Fargo's board that he would be stepping down from his CEO, president, and board member positions immediately. In addition, Sloan said he would retire from the company on Jun. 30. Taking over Sloan's position in an interim CEO role is the company's general counsel, C. Allen Parker.
"We have made progress in many areas and, while there remains more work to be done, I am confident in our leadership team and optimistic about the future of Wells Fargo," said Sloan in a press release about his retirement. "However, it has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives."
The board said its search for a new CEO will only consider candidates outside the company, as the board believes this "is the most effective way to complete the transformation at Wells Fargo."
Sloan was elected CEO in late 2016 amid a sales-practice scandal that damaged the bank's reputation. The negative spotlight on the bank has persisted throughout Sloan's time at the helm of the company.
Investors may see the board's decision to search for a CEO outside of the company as a way for Wells Fargo to help clear the slate. Shares are up nearly 3% in after-hours trading as of 17:34 p.m. EDT.
RH reports fiscal fourth-quarter earnings
Home-furnishings retailer RH beat analysts' average estimate for non-GAAP earnings per share (EPS) but missed their forecast for revenue. Non-GAAP EPS for the period was $3.00, up from $1.69 in the year-ago quarter. Revenue was $671 million, up from $670 million in the year-ago period. On average, analysts were expecting non-GAAP EPS and revenue of $2.85 and $687 million, respectively.
RH reduced its full-year revenue outlook meaningfully, which likely was the primary cause for the stock's nearly 13% decline in after-hours trading as of 5:47 p.m. EDT on Thursday. Management expects full-year adjusted net revenue between $2.585 billion and $2.635 billion, representing 3% to 5% year-over-year growth. The midpoint of this guidance range represents a 6 percentage point reduction compared to the company's prior preliminary revenue guidance.
The lowered outlook was due to "continued weakness in our core business post the fourth quarter market volatility, the negative trends in the high end housing market, and our continued efforts to edit unprofitable and non-strategic businesses," the company explained in its fourth-quarter update.