Best Buy cuts outlook, suspends buybacks
NEW YORK, Aug 21 – Best Buy Co cut its fiscal-year profit outlook today, citing lower expectations for industry-wide sales and uncertainty about key product introductions, and the consumer electronics retailer suspended its share buybacks for the year.
Shares of Best Buy, which does not expect to further update its earnings outlook for the year, fell nearly 9 per cent.
Best Buy also reported a decline in same-store sales – its eighth in the last nine quarters. That highlights the tough task ahead for new Chief Executive Officer Hubert Joly as he tries to engineer a turnaround at the world’s largest consumer electronics chain.
Sales at stores open at least 14 months fell 3.2 per cent in the second quarter ended on Aug. 4, including a 1.6 per cent decline at the US unit and an 8.2 per cent drop internationally.
Net earnings fell to US$12 million (RM37.39 million), or 4 cents a share, in the quarter from US$150 million, or 39 cents a share, a year earlier. Excluding items, Best Buy earned 20 cents a share.
Shares of Best Buy fell 8.9 per cent to US$16.55 in premarket trading.
Joly was named Best Buy’s chief executive yesterday. The company is a bellwether for the consumer electronics industry. – Reuters