Where Will Best Buy Go Post-Earnings?
T = Trends for a Stock’s Movement
Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services. The company operates retail stores and call centers, and conducts online retail operations under a range of brand names like Best Buy, Best Buy Mobile, the Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales, and the Phone House. Best Buy operates in two segments: domestic and international.
Best Buy apparently told about 2,000 managers around the United States on Wednesday that they were being laid off, a move that would be the company’s biggest job reduction since July 2012 as it continues to cut costs following a weaker-than-expected holiday season. The layoffs will affect about 1.4 percent of Best Buy’s 145,000-person workforce, the Star Tribune learned. The news came a day before the company’s scheduled announcement of fiscal fourth-quarter results. The Richfield-based electronics retailer is expected to report a profit of about $1 per share, a reversal from a loss of $1.21 a share a year earlier. But Best Buy executives began facing questions about the sustainability of the company’s recovery after issuing its holiday sales results last month, in which it disclosed that sales at stores open for at least a year fell 0.9 percent during a nine-week period from November to early January. Investors and analysts were expecting a small gain in same-store results.
At the time, Best Buy Chief Executive Hubert Joly called the performance a “speed bump” and reiterated previous statements that the company’s “transformation” was in its early stages and would take a long time. “It doesn’t change the overall story,” Joly said. However, he also said the company would accelerate its effort to lower costs. In a first step in that direction, Best Buy in late January cut about 950 jobs in Canada, about 6 percent of its workforce there. The layoff on Wednesday was first reported by the New York Post, which cited an anonymous source and reported that, “Affected workers are mostly in middle management.” Best Buy declined to comment.