Still the Best Buy?
Shares of Best Buy were in the red for a second consecutive day on Tuesday after reporting a 91% decline in its Q2 profit and suspending its earnings guidance for the year as it continues to battle falling sales. Management blamed the suspended view on lowered expectations for industry wide sales, uncertainty surrounding several key product launches expected and the arrival of new CEO Hubert Joly next month.
Same-store sales in its most recent quarter fell by 3.2%, the eighth time in the last nine quarters that sales have fell. In the U.S., sales fell 1.6%, with consumer electronics sales falling by nearly 10%. Internationally, sales fell by 8.2% largely due to slower consumer spending in China. All in, Best Buy reported a profit of $12 million, of $0.04 per share vs. $128 million, or $0.34 per share a year earlier.
With one-time items removed, earnings were $0.20 per share vs. $0.39 a year ago while revenue fell 2.8% to $10.55 billion. Analysts were looking for earnings of $0.31 on revenue of $10.63 billion. The disappointing quarterly results came a day after the company said that founder Richard Schulze, who is looking to take the company private, had declined the chance to conduct due diligence on the company and Schulze criticized the selection of Joly for the CEO post due to his lack of retail experience.
Best Buy (BBY : NYSE : US$17.80), Net Change: -0.36, % Change: -1.98%, Volume: 40,482,832