Consumer electronics retailer Best Buy Co., Inc. (BBY) reported Thursday a huge loss for the fourth quarter compared to a profit last year as the results were hit by significant charges related to Carphone Warehouse.
The company also announced some big changes in an effort to cut costs $800 million by fiscal 2015.
The retailer said it will shutter 50 U.S. big box stores in fiscal 2013, while opening 100 more U.S. Best Buy Mobile small format stand-alone stores.
The company aims to take advantage of the red-hot smartphone and tablet markets by having as many as 800 mobile stores by fiscal 2016, up from the current 305 such stores.
"These changes will also help lower our overall cost structure. We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices --- which will help drive revenue," CEO Brian Dunn said in a statement.
The Richfield, Minnesota-based retailer, which is also known as the 'big blue box' because of the prominent design on Best Buy stores, reported a net loss of $1.70 billion or $4.89 per share for the fourth quarter, compared to net income of $651 million or $1.62 per share in the prior-year quarter.
The company said results for the latest quarter include $2.6 billion of charges primarily related to the purchase of Carphone Warehouse Group plc's share of the Best Buy Mobile profit share agreement.
Excluding charges, adjusted earnings form continuing operations grew to $871 million or $2.47 per share from $798 million or $1.98 per share for the year-ago quarter.
On average, 25 analysts polled by Thomson Reuters expected the company to earn $2.16 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Adjusted revenue for the quarter grew 3 percent to $16.73 billion from $16.26 billion in the same quarter last year, but missed twenty-two Wall Street analysts' consensus estimate of $17.20 billion. Best Buy reported that its total comparable store sales declined 2.4 percent on top of 4.7 percent drop last year.
Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates as comparable store sales declined. The company also provided earnings outlook for the full-year 2012, and projected weak revenues for the year.
Looking ahead to fiscal 2013, Best Buy said it expects adjusted earnings in a range of $3.50 to $3.80 per share, on projected revenues between $50 billion and $51 billion, with comparable store sales anticipated to decline in the range of 2 to 4 percent. Street is currently looking for full-year 2013 earnings of $3.70 per share, on revenues of $51.88 billion.
In Thursday's regular trading session, BBY is currently trading at $24.78, down $1.84 or 6.91% on a volume of 3.40 million shares. In the past 52-week period, the stock has been trading in a range of $21.79 to $32.85.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org