Smith's departure surprised some on Wall Street, who regard him as the company's most successful CEO.

The seller of Jimmy Dean sausage and Ball Park hot dogs also reported disappointing quarterly results, citing increased investment spending, the double whammy of spiking chicken feed costs and lower demand, and a prepared foods production hiccup following the closure of a factory that makes pizza toppings.

"We are not at all happy to see Mr. Smith step down," Pivotal Research Group analyst Timothy Ramey wrote in a client note. Shares of Tyson have more than quadrupled since Smith became CEO seven years ago.

"It has been the best period of Tyson's history, without doubt," said Ramey, adding that it is unusual for a company to part with its best CEO. Smith is 56 years old.

In another concern for investors, Tyson and other chicken processors face class-action lawsuits accusing them of price fixing. Tyson has been looking to expand profits by selling more "value-added" items such as pre-seasoned products and heat-and-serve meals, which command higher margins than basic meats.

Tom Hayes, the company's president, will succeed Smith who has been at the helm since November 2009. Hayes, 51, was previously chief supply chain officer for Hillshire Brands Co, which Tyson bought in 2014.

Tyson also decided to retain Smith as an adviser for three years, an unusually long period for such a transition. The company canceled a media call, making it harder to get a further explanation.

Tyson expects profit of $4.70 to $4.85 a share in the year ending September 2017, below analysts' average estimate of $4.98. It said it would boost capital spending to $1 billion from $700 million in 2016 to increase production and improve worker safety, animal welfare, food safety and its supply chain.

"The board's decision to name Tom (Hayes) CEO at this time was based on both his track record and how his skills align with the company's strategic direction and continuing evolution," John Tyson, chairman of the board and the founder's grandson, said in a statement.

Smith said it was an excellent time for a CEO change and that the ongoing price-fixing litigation had no bearing on his departure.

"That has nothing to do with the transition," Smith said.

Tyson said sales fell 12.8 percent from a year earlier to $9.16 billion in the fourth quarter ended Oct. 1. Tyson cited sharply lower beef prices and lower prices for value-added chicken products.

Analysts, on average, had expected revenue of $9.38 billion, according to Thomson Reuters I/B/E/S.

Excluding items, the company earned 96 cents a share, missing analysts' average estimate of $1.17 per share. Net income attributable to Tyson surged 51.6 percent to $391 million, or $1.03 per share, helped by lower feed and livestock costs.

Shares were down 14.6 percent to $57.56 in afternoon trading. As of Friday's close, Tyson stock had surged 26.3 percent this year.

(Reporting by Lisa Baertlein in Los Angeles and Sruthi Ramakrishnan in Bengaluru; Editing by Martina D'Couto, Bernadette Baum and David Gregorio)

By Lisa Baertlein and Sruthi Ramakrishnan