MINNEAPOLIS (AP) — Best Buy Co. said it plans to close 50
big box stores and open 100 small mobile locations in the U.S. in fiscal
2013 and cut $800 million in costs by fiscal 2015. The news came
Thursday as the biggest U.S. specialty electronics retailer posted a
fiscal fourth quarter loss partly due to restructuring charges, but its
adjusted results topped Wall Street’s expectations.
Best Buy’s
strategy of focusing on closing some of its hulking stores to
concentrate on smaller Best Buy Mobile outlets illustrates the shifting
nature of the electronics industry. Shoppers aren’t flocking to big-box
stores like they used to. And sales of TVs, digital cameras and
videogame consoles have weaken, while sales of tablet computers,
smartphones and e-readers have increased.
Best Buy lost $1.7
billion, or $4.89 per share, for the period ended March 3. That compares
with a profit of $651 million, or $1.62 per share, a year ago.
The
Minneapolis company said its quarterly results included $2.6 billion in
charges. They were mostly related to its purchase of Carphone Warehouse
Group PLC’s interest in the Best Buy Mobile profit-sharing agreement
and related costs, as well as an impairment charge tied to writing off
Best Buy Europe goodwill and restructuring charges.
Taking these
items out, adjusted earnings were $2.47 per share, above the $2.15 per
share that analysts surveyed by FactSet forecast.
Revenue rose 3 percent to $16.08 billion, but missed Wall Street’s $17.18 billion estimate.
Best Buy’s stock fell 32 cents to $26.30 before the market opened.
Revenue
at stores open at least a year — an indicator of a retailer’s health —
slipped 2.4 percent. But it was a smaller drop than a year earlier when
the company reported a 4.7 percent decline.
For the full year,
Best Buy lost $1.23 billion, or $3.36 per share, compared with a profit
of $1.28 billion, or $3.08 per share, in the prior year. Adjusted
earnings were $3.64 per share, which tops the previous year’s $3.43 per
share.
Annual revenue rose 2 percent to $50.71 billion. Revenue at
stores open at least a year fell 1.7 percent. In the prior-year period,
the figure dropped 1.8 percent.
Going forward, Best Buy said it
expects to reduce about $250 million of its costs in fiscal 2013. The
company foresees fiscal 2013 earnings of $2.85 to $3.25 per share and
adjusted earnings of $3.50 to $3.80 per share. Analysts expect earnings
of $3.67 per share.
Copyright 2012 The Associated Press.