Weak demand for pricey flat-screen TVs and notebook computers helped push Best Buy Co.'s fourth-quarter net income down 16 percent. The decline adds urgency to the electronics retailer's bid to remake its business by opening smaller stores and focusing on more profitable, fast-growing categories such as tablet computers and smartphones. Fourth-quarter net income fell to $651 million, or $1.62 per share, from $779 million, or $1.82 per share.Best Buy has been restructuring its international operations, particularly in China, and cutting costs in its U.S. supply chain. Excluding costs for those moves, net income totaled $1.98 per share. That beat the $1.84 analysts expected, according to FactSet.
Revenue edged down 2 percent to $16.26 billion. U.S. revenue fell 4 percent to $12.1 billion, while international revenue rose 4 percent to $4.1 billion.
Best Buy is changing its TV-selling strategy by significantly increasing TV selection online -- offering 100 models in stores but 300 more online only at more competitive prices.
The chain is also pushing hard to open smaller stores. The company is opening 150 smaller-format mobile only stores by the end of the year, nearly doubling its total to 325.
"We are exploring and redefining what the optimal big-box footprint is for us," CEO Brian Dunn said on a call with analysts.
For the year, net income fell 3 percent to $1.28 billion, or $3.08 per share, from $1.32 billion, or $3.10 per share last year. Revenue rose 1 percent to $50.27 billion from $4.97 billion.
In fiscal 2012, the company expects net income of $3.30 to $3.55 per share, excluding costs related to restructuring its international operations and cutting costs in its U.S. supply chain. Analysts expect $3.56 per share.
Best Buy predicts revenue of $51 billion to $52.5 billion. Analysts expect $52.1 billion.
Shares fell 90 cents, or 2.8 percent, to $30.95 during midday trading.
No comments:
Post a Comment