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Best Buy profit tanks 91%, stock tumbles to 9-year low

crash and burn!

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#1 +warwagon

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Posted 21 August 2012 - 16:29

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.


^ Notice how I spaced out the sentences making it easier to read ^ :rolleyes:

http://www.latimes.c...0,3651703.story


#2 Nerd Rage

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Posted 21 August 2012 - 16:30

I can't say I'm surprised. With Amazon, Newegg, Microcenter, etc etc, Best Buy just doesn't have competitive prices.

#3 CentralDogma

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Posted 21 August 2012 - 16:31

I like the tag.

#4 OP +warwagon

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Posted 21 August 2012 - 16:31

Yep, I would have to say Amazon prime by itself would single handily click BB's ass.

#5 HSoft

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Posted 21 August 2012 - 16:38

I can't say I'm surprised. With Amazon, Newegg, Microcenter, etc etc, Best Buy just doesn't have competitive prices.

^this

#6 Vice

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Posted 21 August 2012 - 16:43

Best Buy closed all their stores in the UK recently. Not really missing them though as they made you feel like a criminal they had zip ties around every gadget on display almost exclusively right across the touch screens making them difficult to try and you would constantly be accosted by pushy sales people as you browsed around. I spent 30 minutes in a store looking at various products, mostly tablets and must have had 4 different employees ask me if I needed help. I'm sure if I needed help I'd ask someone they had employees everywhere they weren't hard to miss.

Just as I was walking out of the store another patron made a bit of a scene by saying loudly "I'm sick of you people keep asking me if I need anything, I'm leaving" it was really that ridiculous that she felt the need to complain out loud and she did promptly leave the store.

In-fact every time I went to the store the employee to customer ratio was like 3 employees to 1 customer.

#7 zeta_immersion

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Posted 21 August 2012 - 16:43

My first game F22 Raptor 3 was from best buy ... and a 56x CD Rom ... good times, after being asked to pay 60$ to install I started doing things for myself ...

#8 PGHammer

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Posted 21 August 2012 - 16:43

I can't say I'm surprised. With Amazon, Newegg, Microcenter, etc etc, Best Buy just doesn't have competitive prices.


Amazon and Newegg (and especially Amazon) are the biggies - being e-tailers, they don't charge sales tax; heck, they generally don't keep inventory (in most cases, they have a distributor, such as TechData or Ingram Micro, drop-ship).

MicroCenter nibbles at the edges (especially with closeouts, loss-leaders, etc.) - however, they aren't the e-tail force that Amazon is.

Everyone is looking for bargain prices on known-quality items - they may go to Best Buy (or another brick and mortar retailer) to browse, but then turn right around and buy on Amazon. Folks are thinking that it says bad things about Best Buy; actually, it says a lot of bad things about retail (or even about what we think about our governments at the local level) - why are we going to such trouble to deny local and state governments revenue? Wal-Mart (despite the grief they get) is practically the only retailer doing decently at the ordinary-Joe/Jane end. It's all about bargains - and not paying sales/consumption/VAT - legally telling our local and state governments to whistle.

#9 I am Reid

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Posted 21 August 2012 - 16:49

I can't say I'm surprised. With Amazon, Newegg, Microcenter, etc etc, Best Buy just doesn't have competitive prices.


I love microcenter. Its like a TRUE electronics store, they have a huge selection to choose from, unlike bestbuy who would just have for example 1 type of HDD in 3 sizes. Microcenter has all different types, sizes, manufactures, OEM packaging, retail box, ect... They even have IDE. Also going along with their big internet like selection is the internet pricing, they have legitimate internet pricing at a retail store. The one thing I hate about buying online is waiting on the shipping, with microcenter I can get my product instantly, sure we have sales tax on it, but Ohio's sales tax is only like 6% so it ends up costing about the same as shipping anyways.

#10 spacer

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Posted 21 August 2012 - 16:51

Unfortunately, Best Buy's prices and employee apathy/ignorance are to blame for their woes. I have been to a handful of different Best Buy locations across 3 different states and not once did I ever come across a floor rep that knew what they were talking about. On top of that, their prices are usually just above Amazon or Newegg. And with free shipping, that difference is the key. I'll buy from where ever the best deal is, but Best Buy usually doesn't have the best deal out there.

I only go to Best Buy now a days to see a phone, tablet, TV, or whatever else in person before I buy it somewhere else.

#11 +Brando212

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Posted 21 August 2012 - 16:53

@I Am Reid: wow I had never heard of Microcenter before, I wish we had a few here in Nebraska

#12 +Bryan R.

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Posted 21 August 2012 - 17:15

It's a shift in how we buy our products that these companies aren't capitalizing on. It's so obvious on an elementary level that these enormous retail stores and staff are no competition for the ease of online retailers. These CEOs are clueless. I would say it doesn't matter, but it actually does. It is a shame that stores who would normally employ many people are based on aging business models. Further, that they are replaced with more "efficient" retailers that operate with less [people].

#13 Xilo

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Posted 21 August 2012 - 17:16

Not really surprised. Everything in Best Buy is so overpriced.

#14 jerzdawg

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Posted 21 August 2012 - 17:25

Not really surprised. Everything in Best Buy is so overpriced.

This. I dont have any allegiance to one paticular retailer. I go to whoever is going to give me the best price, on a rare occasion Best Buy has the best offer for a bluray I am looking for but that's about it. Every other item I look to purchase can be mailed to my house tax free from Amazon with usually a 20% (min.) cheaper price. I understand they have way more overhead than an e-tailer but they need to adapt to the business model or there is no way they can survive. I hate whenever I go there and see people bringing in their desktop to the Geeksquad to get repaired because I know they are going to get raked over the coals with the prices they charge.

#15 Gotenks98

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Posted 21 August 2012 - 17:26

Unfortunately, Best Buy's prices and employee apathy/ignorance are to blame for their woes. I have been to a handful of different Best Buy locations across 3 different states and not once did I ever come across a floor rep that knew what they were talking about. On top of that, their prices are usually just above Amazon or Newegg. And with free shipping, that difference is the key. I'll buy from where ever the best deal is, but Best Buy usually doesn't have the best deal out there.

I only go to Best Buy now a days to see a phone, tablet, TV, or whatever else in person before I buy it somewhere else.

^^^^This x infinity. Thats why I hardly go there now and only shop there when they have the lowest possible price and most of the time using the coupons instead of cash. Its really gone down hill and I do not expect them to recover till they get their act together. While I dont see it dying off completely like Circuit City its going to definitely go thru some restructuring.