NEW YORK (TheStreet) - Walmart's (WMT - Get Report) announcement Thursday that Bill Simon, CEO of Walmart U.S., is leaving the company and the world's largest retailer garnered mixed reactions by the analyst community.

Wall Street was generally unsurprised that Simon is leaving -- chatter that his departure may have been over disappointment at being passed up for promotion as Walmart's CEO earlier this year with the company instead choosing its international head, Doug McMillon. However, analysts seemed curious about Walmart's decision to pass over those underneath Simon to replace him, instead naming an executive who had been heading up its China and greater Asia operations.

Greg Foran, 53, Walmart's head of its operations in Asia, is replacing Simon, and his experience is "primarily outside the U.S.," Deutsche Bank analyst Paul Trussell wrote in a research note. "In our view, this presents a substantial learning curve and showcases a clear change in direction of the division, for him to successfully bypass all of Bill's lieutenants such as Chief Merchandising Officer, Duncan Mac Naughton."

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That said, the change in management "presents an opportunity for WMT to think differently about how it positions itself for the future of retailing," Trussell penned in the note. "These changes may include a substantial reduction in supercenter store openings and a focus on e-commerce and small stores, which we note would be a long-term positive for shares (but negative for dollar stores, grocery, and other discounters). Near-term, there is concern that 2Q results may once again be lackluster."

Walmart shares were falling 0.80% to $76.38 on Thursday.

Walmart is under pressure, as sales in its U.S. business have been struggling. The discount retailer said in May it expects U.S. comps for the second quarter to be "relatively flat." Under Simon, the unit has been making investments in its e-commerce business and placing focus on building smaller stores. Walmart reports fiscal second quarter earnings on Aug. 14. Analysts, according to Thomson Reuters, expect the company to report earnings of $1.21 a share on revenue of $119 billion, up just 2% year over year.

Foran will start his new position on August 9. Simon will be available as a consultant for six months to assist with the transition.

"Foran is not well known by Wall Street," wrote Faye Landes, an analyst with Cowen & Co., in a note to clients. "Foran joined the company recently - October 2011 - and has been working in Asia. He was appointed as head of Asia at the end of April 2014, implying that this most recent move was not in the works at that point. We will probably never know the backstory on this - it seems likely that the company knew or at least strongly suspected that Simon would leave, but maybe they originally had someone else in mind as head of U.S." In a press release earlier Thursday, Walmart cited Foran's experience citing him as a "35-year retail veteran."

Prior to Walmart, Foran held a number of roles with Woolworths, a leading retailer in Australia and New Zealand. He also "served as the managing director of supermarkets, liquor and petrol with responsibility for more than $40 billion in sales at that time." While running Walmart's Chinese business, the unit made "significant progress" in areas such as merchandise assortment, pricing, store operations and compliance. Foran also made strategic investments in Walmart's supply chain there and improved the store portfolio, according to the release.

"Greg is one of the most talented retailers I've ever met," McMillon said in the release. "His depth of knowledge and global experience will bring a fresh perspective to our business. His passion for fresh food, experience in general merchandise and commitment to e-commerce will help us serve our customers even more effectively for years to come."

"I'm confident that Greg's strong leadership skills and alignment with our culture will serve our customers and associates well," he added.

Walmart spokeswoman Brooke Buchanan told TheStreet in a follow-up interview that Foran's "broad merchandise experience," makes him a "great fit for the position."

"He's passionate about it, loves to walk stores, loves merchandising and has just a really strong background to lead the U.S. business," Buchanan says. The market Foran was in charge of while at Woolworth's is a "competitive mature market, similar to the U.S.," she adds.

Foran will be relocating to Bentonville, Ark., where Walmart is headquartered.

Though some analysts see this as a head-scratcher, not everyone is questioning why Foran was brought in.

"Overall this change is not surprising to us given that the CEO, Doug McMillon, believes a greater emphasis on merchandising is necessary to return the U.S. business to positive comps," JPMorgan Chase analyst Christopher Horvers wrote in a note to clients. "McMillon previously led the international division and is able to implement 'his guy' from that team who is more experienced in merchandising compared to Simon, whose prior experience was COO of WMT and SVP of global business development at Brinker International (EAT)."

As for Simon, speculation has already begun about where he might land next, including whether he would become the next CEO at Target (TGT). However, his non-compete agreement prevents him from taking a job at a Walmart competitor for at least two years, analysts said.

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.