The Richfield, Minn.-based retailer also said it has reduced its earnings outlook for the year on lower industry sales expectations, uncertainty surrounding new product launches and its naming on Monday of a new chief executive. The company declined to issue a new profit forecast. In May, it had forecast an annual profit of between $3.50 and $3.80 a share.
On Monday, it named Hubert Joly, chief executive of Carlson Cos., a hospitality and travel company as new CEO effective Sept. 1.
| Head Geek; Hubert Joly |
The worse-than-expected results sent Best Buy shares to nine-year lows on Tuesday. Combined with a similar selloff Monday, the company is on track to lose a fifth of its market value in just two days. Its stock was recently trading down 5.5%, or $1.01, at $17.15 on the New York Stock Exchange. It suspended a share-buyback program that acquired 6.3 million shares in the first quarter at an average price of $19.28 a share.
The big-box retailer said same-store sales—which reflect revenue at stores, call centers and websites operating for at least 14 months—fell 3.2% in the latest period. It is the eighth time in the last nine quarters Best Buy's comparable-store sales have dropped.
In the U.S., same-store sales fell 1.6%. Its biggest category, computing and mobile phones, continued steady same-store sales growth domestically, a bright spot considering other retailers' reports that shoppers are biding time on personal-computer purchases ahead of new Windows operating system in fall. However, the company noted that strength was based in tablet and mobile phone sales.
Its key consumer electronics sales kept dwindling, this time with a 9.6% domestic drop.
Best Buy was the latest retailer to report a downturn internationally, with an 8.2% drop in international same-store sales linked largely to slowing consumer spending in China.
No comments:
Post a Comment