Best Buy reports 3rd-quarter loss
Best Buy Co. reported another dismal quarter on Tuesday, Nov. 20, 2012, recording a loss in the third quarter, hurt by a continued sales slump and charges related to restructuring.
NEW YORK — Best Buy Co. reported another dismal quarter on Tuesday, recording a loss in the third quarter, hurt by a continued sales slump and charges related to restructuring.
Shares fell more than 11 percent in morning trading to its lowest level in more than a decade.
The electronics chain is struggling to reverse a yearslong decline in its business as competition from online stores and discounters increases, and consumers' tastes shift from more profitable items like TVs and desktop computers toward less profitable smartphones and tablets.
In addition, it's facing a growing number of consumers who are "showrooming," going to Best Buy stores to check out merchandise but buying it elsewhere, is a challenge for the retailer.
"In-line with trends experienced over the last three years, Best Buy's third quarter financial performance was clearly unsatisfactory," said CEO Hubert Joly, a turnaround expert tapped in August to help improve results.
Last week at an analyst meeting, Joly outlined a plan to improve results via beefing up customer service and revamping stores while at the same time cutting overhead and supply-chain costs.
"The results we are reporting today only strengthen our sense of urgency and purpose," Joly added.
Best Buy Co., based in Richfield, Minn., reported a loss of $10 million, or 3 cents per share, for the three months ended Nov. 3. That compares with net income of $156 million, or 42 cents per share in the prior year period.
Excluding one-time items, net income totaled 3 cents per share. Analysts expected net income of 13 cents per share.
Revenue fell 4 percent to $10.75 billion from $11.15 billion but still matched analysts' expectations.
Revenue in stores open at least one year continued to slide, down 4.3 percent for the quarter. The measure is an important gauge of a retailer's financial health because it excludes results from stores that open or close during the period.
Sales growth in mobile phones, appliances and tablets and e-readers was offset by weakness in notebook computers, video games, digital cameras and TVs.
Shares fell $1.55, or 11.3 percent, to $12.20 in morning trading after falling as low as $12.12 in earlier trading, the lowest since October 2002.
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