Best Buy results, same-store sales weak; shares tumble
By Dhanya Skariachan and Olivia Oran
(Reuters) - Best Buy Co Inc (BBY.N: Quote) shares fell to their lowest level in a decade on Tuesday as the electronics retailer reported a weaker-than-expected quarterly profit and same-store sales fell for the ninth time in 10 quarters.
The shares tumbled 14 percent to $11.79 in morning trading, highlighting the challenges the company's new chief executive faces in trying to turn around the world's largest consumer electronics chain.
The news came just days before the unofficial start of the holiday shopping season and amid a wide restructuring under CEO Hubert Joly and a looming buyout proposal from founder Richard Schulze.
"The results we are reporting today only strengthen our sense of urgency and purpose," said Joly, who took the helm of Best Buy in September.
The company is a victim of aggressive competition from online and discount rivals and what critics call a failure to adapt to a changing retail environment.
Critics say Best Buy stores are hurting because they have become showrooms for Amazon.com Inc (AMZN.O: Quote) and other online retailers, as shoppers check out electronics like high-definition TVs and then buy them elsewhere for less.
"Few people are going to be willing to pay $80 for a cable in-store when they know they can buy an equivalent product online for $5," said Rakesh Agrawal, principal analyst at San Francisco-based consulting firm reDesign Mobile.
On a conference call, Best Buy executives said they expected the retailer to benefit from its promise to match competitors' prices on some items during the holiday shopping season, and from additional training it gave workers at its stores. Continued...