Best Buy profit tanks 91%, stock tumbles to 9-year low
Looks like Best Buy Co.’s new chief executive has his work cut out for him, with the electronics retailer’s profit falling 91% and its stock plunging to a nine-year low.
The sour earnings report came the day after Best Buy announced Hubert Joly, head of Radisson and T.G.I. Friday’s parent Carlson Cos., as its new chief executive.
The Frenchman brings “expertise in turnaround and growth” at “a critical moment,” Best Buy said during the reveal. On Tuesday, the company said its net income in its second quarter, which ended Aug. 4, slid 91% to $12 million, or 4 cents a share, from $128 million, or 34 cents a share, during the same period last year.
Revenue dropped 3% to $10.5 billion. The company’s stock sank to nine-year lows, plummeting as far as $16.23 a share in morning trading after closing at $18.16 a share on Monday.
Best Buy suspended future earnings projections for the rest of its fiscal year, noting Joly’s appointment as well as “lowered expectations for industry-wide sales and the uncertainty associated with several key product launches” in the next six months.
Joly will take over next month, heading up a company attempting a hard refresh. Best Buy has been slammed by rivals such as Amazon.com. A personal conduct scandal in the spring forced the business to cycle through three chief executives in half a year. With sales sliding, the company has had to rethink its large-format stores, closing some down and reworking others. Founder and former chairman Richard Schulze is attempting to take Best Buy private.
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