LOS ANGELES — A day after Best Buy Co. named a turnaround expert as its new chief executive, the electronics retailer announced its profit fell 91 percent in the second quarter.
The sour earnings report came after Best Buy announced Hubert Joly, head of Radisson and T.G.I. Friday’s parent Carlson Cos., as its new chief executive.
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The Frenchman brings “expertise in turnaround and growth” at “a critical moment,” Best Buy said during the reveal. On Tuesday, the company said its net income in its second quarter, which ended Aug. 4, slid 91 percent to $12 million, or 4 cents a share, from $128 million, or 34 cents a share, during the same period last year.
Revenue dropped 3 percent to $10.5 billion. The company’s stock sank 1.4 percent Tuesday to $17.91 a share.
Best Buy suspended future earnings projections for the rest of its fiscal year, noting Joly’s appointment as well as “lowered expectations for industry-wide sales and the uncertainty associated with several key product launches” in the next six months.
Joly will take over next month, heading up a company attempting a hard refresh. Best Buy has been slammed by rivals such as Amazon.com Inc. A personal conduct scandal in the spring forced the business to cycle through three chief executives in half a year. With sales sliding, the company has had to rethink its large-format stores, closing some down and reworking others. Co-founder and former chairman Richard Schulze is attempting to take Best Buy private.
Last summer Best Buy shares were trading in the $30 range, but the stock has been steadily sliding since the fall of 2010.
From last year, the company shrunk its total big box square footage in the country by 4 percent. The steady decline in same-store sales slowed domestically, falling 1.6 percent compared to their 3.7 percent dive in the previous quarter.
But abroad, same-store sales tanked 8.2 percent. Revenue is slipping in China and Canada and more competition is squeezing the company in Europe.
Online, however, Best Buy is still making headway, with domestic Web-based revenue growing 14 percent on good sales of tablets, mobile phones, appliances and e-readers.
The retailer is losing steam in other sectors, however, including gaming, digital imaging, televisions and notebooks.
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