Best Buy Co., the consumer-electronics retailer being evaluated for a takeover by its founder, posted a $10 million fiscal third-quarter net loss as sales at established stores fell more than expected.
The loss in the quarter ended Nov. 3 was 3 cents a share, compared with profit of $156 million, or 42 cents, a year ago, Richfield, Minnesota-based Best Buy said today in a statement. Excluding some items, profit was 3 cents a share. The average of 16 analysts’ estimates compiled by Bloomberg was 12 cents.
Chief Executive Officer Hubert Joly is working to improve customer service as customers defect to Amazon.com Inc. and Wal- Mart Stores Inc., all while founder Richard Schulze and private- equity firms evaluate the chain for a possible buyout. Best Buy said last month that third-quarter results would be “significantly” below last year’s. Same-store sales fell 4.3 percent, more than the 3.3 percent drop estimated by analysts.
“They said they were going to produce lousy results and they didn’t disappoint -- they produced lousy results,” Erik Gordon, a business and law professor at the University of Michigan, said today by telephone from Ann Arbor. “It gives the Schulze gang ammo to say Best Buy is lost.”
Best Buy fell 6 percent to $12.93 at 8:48 a.m. in New York. The shares tumbled 41 percent this year through yesterday.
Joly said in an interview last week that he plans to boost Best Buy’s share of U.S. online sales to 18 percent, the market share of its stores, from 7 percent. Online sales in the quarter climbed more than 10 percent to $431 million, Best Buy said. Total revenue fell 3.5 percent to $10.75 billion. Analysts’ estimated $10.74 billion, on average.
Best Buy lacks the connection to consumers enjoyed by Amazon and Apple Inc., Joly, 53, said last week.
“Best Buy has lost a little bit of this,” he said in an interview at Bloomberg News headquarters in New York. “We need to reinvent our brand identity.”
Schulze, 71, is working with three private-equity firms, including Cerberus Capital Management LP, on a takeover of the electronics chain as his deadline to review the company’s finances approaches, people familiar with the matter have said.
Schulze reached an agreement to conduct due diligence on the retailer in August and now is asking for an extra 30 days, said the people, who asked not to be named because the process is private.