Best Buy cuts outlook, suspends buybacks

RICHFIELD, Minn., Tue Aug 21, 2012 – Best Buy Co. cut its fiscal-year profit outlook on Tuesday, citing lower expectations for industrywide sales and uncertainty about key product introductions, and the consumer electronics retailer suspended its share buybacks for the year.

Shares of Best Buy, which does not expect to further update its earnings outlook for the year, fell nearly 9 percent.

Best Buy also reported a decline in same-store sales – its eighth in the last nine quarters. That highlights the tough task ahead for new CEO Hubert Joly as he tries to engineer a turnaround at the world’s largest consumer electronics chain.

Sales at stores open at least 14 months fell 3.2 percent in the second quarter ended on August 4, including a 1.6 percent decline at the U.S. unit and an 8.2 percent drop internationally.

Net earnings fell to $12 million, or 4 cents a share, in the quarter from $150 million, or 39 cents a share, a year earlier. Excluding items, Best Buy earned 20 cents a share.

Shares of Best Buy fell 8.9 percent to $16.55 in premarket trading.

Joly was named Best Buy’s chief executive on Monday. The company is a bellwether for the consumer electronics industry.