Best Buy Q1 profit down 26%, but beats Street
Minneapolis -- Best Buy said its profit for the first quarter fell 26% amid higher restructuring charges and lower comparable store sales. However, adjusted earnings topped analysts' expectations and the company maintained its earnings outlook for fiscal 2013.
Best Buy said its profit fell to $158 million in the quarter ended May 5, from $212 million in the year-ago period.
Revenue rose 2% to $11.61 billion, helped by an extra week, and sales of tablets and mobile phones. International sales fell on weakness in China and Europe.
Total same-store sales fell 5.3%.
In the United States, online revenue jumped 20% and same-store sales for mobile phones climbed 13%. But sales of notebooks, gaming products and digital imaging and televisions were weak.
Internationally, same-store sales dropped 11%, weighed down by a 28% decline at Best Buy's Five Star stores in China.
“Best Buy is in a turnaround, and the strategic priorities we laid out at the beginning of the year are just the first phase of the changes to come," said Mike Mikan, CEO (interim) of Best Buy. "We know we have to better adapt to the new realities of the marketplace, and we are creating a long-term plan designed to make Best Buy more relevant with customers and position the company for sustained, profitable returns in the years ahead.”
In the chain’s quarterly conference call, Mikan promised bold action to turn the chain around, and said the chain is developing a new long-term plan. He did not give any specifics of the plan, but said the goal was to make Best Buy more relevant and more nimble.