Best Buy earnings drop 77 percent
This blog was corrected at 3:35 pm PT to explain the amount of Best Buy workers offered buyouts. Though Black Fri. sales were better than expected, Best Buy’s Q3 takings brought another heaping of bad news for the embattled electronics retail industry. For Q3 of 2008, Best Buy reported takings Tues. of $52 million, or thirteen cents per share, on turnover of $11.5 bln. The Street had been forecasting takings of 24 cents per share and money of $11.09 bln.
It is a 77 percent drop from the same quarter a year back, when the retailer reported revenues of $228 million, or 53 cents a share. Best Buy Boss Brad Anderson put the industry landscape in sheer terms. “The historical leveling off in the economy and its effect on our business during the last ninety days have been the most challenging shopper environment our company has ever faced,” he announced in a press release. “We believe that there was a dramatic and possibly enduring change in client behavior as folk adjust to the new realities of the marketplace.”. Anderson added that changes will be made to his company’s cost structure. To start with, the company is offering voluntary buyouts to “nearly all” of its four thousand company staff. If buyouts aren’t taken, he indicated there may be layoffs.
He added the company hopes to cut capital expenditures in half, and will scale back store openings. Best Buy is a long way from the sole retailer struggling. Chief rival Circuit Town was forced into bankruptcy and elected to shut lots of its stores last month, whilst regional electronics retailer Tweeter also shut its doorways this month.
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