Best Buy said the change was part of its succession plan, but investors may question the timing of the announcement, which follows the worst holiday sales season in decades.

"I don't think the Street will have an issue" with Best Buy naming Dunn as its new CEO, said Joseph Feldman, analyst at Telsey Advisory Group. "I think the question would be about timing."

Best Buy shares fell 1.6 percent to $26.80 in early trading on the New York Stock Exchange.

Anderson, 59, will retire as CEO on June 24 but will complete his term as vice chairman, Best Buy said. Dunn, 48, will also be appointed to the board of the company.

Anderson has been Best Buy's CEO for seven years and was only the second person to take on the top job at the company after its founder Richard Schulze.

Best Buy's announcement comes just days after its bankrupt rival Circuit City Stores said it will liquidate its merchandise and shut hundreds of U.S. stores.

Analysts expect Circuit City's failure will boost Best Buy's long-term chances of snatching more sales and gaining clout with suppliers.

Feldman said it made sense to bring in a new CEO as the company hits a transition point in its strategy.

"The TV cycle is starting to wane a little bit," Feldman said. "They're heading toward Europe with more vigor, especially with the Carphone deal. So I think they want that new energy."

Best Buy announced a joint venture with Britain's Carphone Warehouse last year to expand into Europe.

The company said it has not decided about filling Dunn's position when he assumes the CEO role.

(Reporting by Aarthi Sivaraman, additional reporting by Nicole Maestri, editing by Gerald E. McCormick, Dave Zimmerman)