There’s more bad news this week for big box retailer Best Buy (News - Alert), which has been struggling to stay relevant during the last few years. The company’s shares were down three percent in pre-market trading this morning. The company has acknowledged that it saw a significant decline in its third-quarter revenue: about 4.7 percent compared to the prior year period.
The retailer lost $10 million, or three cents a share, after earning $156 million and 43 cents a share during the same period one year prior. Excluding one-time items, Best Buy earned just three cents a share: far below analysts’ expectations of 13 cents a share.
Image via www.bestbuy.com
The company recently acknowledged what it’s calling an “unsatisfactory” quarter.
“In line with trends experienced over the last three years, Best Buy’s third quarter financial performance was clearly unsatisfactory,” said Hubert Joly, Best Buy president and CEO. “On November 13, we shared our candid assessment of Best Buy’s situation and unveiled Renew Blue, a set of priorities to begin re-invigorating the company’s performance and rejuvenating Best Buy. The results we are reporting today only strengthen our sense of urgency and purpose.”
“Unsatisfactory” may be an understatement.
The company’s domestic segment operating income for the three months ended November 3, 2012 declined to $50 million ($16 million on a GAAP basis) from $249 million in the prior-year period. The decline was due to a lower gross profit rate, higher SG&A expense and lower revenue, said the company in a statement.
The slip in sales and store traffic point to a bleak holiday selling period. Christmas is a key time for retailers, in which some retailers see 40 percent of annual sales, Forbes is reporting today.
This latest quarterly report comes days after new Best Buy CEO Hubert Joly unveiled a turnaround strategy called Renew Blue, a plan to cut costs, drive higher returns on assets and combat showrooming, according to Forbes.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.
Edited by Brooke Neuman