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With company founder Richard Schulze preparing his buyback plan, analysts have been wondering how depressed Best Buy’s (NYSE:BBY) third-quarter results would be for weeks. In the month leading up to Tuesday’s earnings report, analysts’ estimates dropped from 36 cents a share to 12 cents per share, and on August 21 the company suspended its earnings guidance for the quarter because of its “low expectations for industry wide sales.”
Best Buy reported third-quarter results on Tuesday that showed how severe the retailer’s problems have become. Despite chief executive Hubert Joly’s attempts to turnaround the company, Best Buy swung to a loss in the third quarter as customers increasingly choose Amazon (NASDAQ:AMZN) and Wal-Mart (NYSE:WMT) for their electronics purchases.
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For the three-month period ended on November 3, the company’s loss was $10 million, or 3 cents per share, missing analysts already-lowered expectations. In comparison, Best Buy reported a profit of $156 million, or 42 cents per share, in the year-ago quarter.
“They said they were going to produce lousy results and they didn’t disappoint — they produced lousy results,” said University of Michigan business and law professor Erik Gordon to Bloomberg. “It gives the Schulze gang ammo to say Best Buy is lost.”
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