Best Buy Warns Price Investments Could Hit Profits
Best Buy reported weaker-than-expected revenue on Tuesday and warned that a slew of investments to win back shoppers could squeeze profits in the near term.
The news overshadowed a better-than-expected profit from the world's largest consumer electronics chain in the first quarter and sent its shares down in pre-market trading. (Click here to track the company's stock in pre-market trade.)
Net earnings from continuing operations fell to $97 million, or 29 cents a share, from $169 million, or 49 cents a share a year earlier.
Excluding restructuring and other charges, it earned $110 million, or 32 cents per share, down from $262 million, or 76 cents a share in the year-earlier period.
Revenue decreased 10 percent to $9.38 billion from $10.37 billion a year ago.
"As we look forward to the second quarter, while not providing financial guidance, we believe that the ongoing investment in price competitiveness that contributed to our gross profit and EPS declines in the first quarter will continue into the second quarter," said Sharon McCollam, Best Buy's chief financial officer.
Analysts had expected the company to report earnings excluding items of 25 cents a share on $10.66 billion in revenue, according to a consensus estimate from Thomson Reuters.