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Best Buy quarterly profit tops estimates as costs cut
New York • Best Buy, the world's largest electronics chain, posted second-quarter profit that topped analysts' estimates, helped by lower costs.
Revenue fell short in the period ended Aug. 2, hurt by weak demand for mobile phones. Same-store sales, a key measure of a retailer's performance because new and closed stores are excluded, will decline by a "low single digit" rate in the third and fourth quarter, Richfield, Minnesota-based Best Buy said Tuesday in a statement.
Chief Executive Hubert Joly has made good on his promise to reduce expenses since arriving in September 2012, helping the stock more than triple last year. Since then, the shares have slipped as investors doubted whether he can execute the second part of his turnaround plan by reviving sales growth.
Net income fell 45 percent to $146 million, or 42 a share, from $266 million, or 77 cents, a year earlier, the company said. Excluding some items, profit was 44 cents a share. Analysts projected 31 cents a share, the average of 23 estimates compiled by Bloomberg.
Best Buy has blamed its inability to revive sales on a lack of innovation in electronics, leading consumers to wait longer to buy new phones, tablets and televisions. The company has gone as far as citing data from NPD Group that showed sales across the industry in the U.S. fell more than its own.
Joly has said he's counting on the latest devices from Apple and 4K televisions, which have four times the resolution then current displays, to help. Apple is expected to introduce new iPhones next month while Samsung Electronics and Sony are pushing 4K within revamped Best Buy home theater departments.