Best Buy’s earnings slump lays bare size of new chief’s mission

ELECTRONICS retailer Best Buy suspended its earnings forecast yesterday over uncertainty about its ability to continue to compete as the company posted a 91 per cent fall in profits in its second quarter.

The American firm, which appointed a new chief executive and knocked back an approach from founder Richard Schulze on Monday, saw shares fall 10 per cent on the news before recovering.

Best Buy’s profits in the three months to 4 August were just $12m (£7.6m) compared with $150m in the same period a year ago. The company said it was suspending guidance on future earnings “due to lowered expectations for industry wide sales and the uncertainty associated with several key product launches”.

Hubert Joly was poached from hospitality firm Carlson and will start in September. He is tasked with saving the firm in the face of growing competition from cheaper online retailers, as well as dealing with further approaches from Schulze, who claims to have a plan to rejuvenate the company.