Troubled electronics retailer Best Buy's earnings plunged 91 percent in the second quarter, the company reported Tuesday, a day after naming a turnaround specialist as its new chief executive.
Under pressure from online consumer electronics vendors and a takeover bid by the company's founder and ex-chairman, Best Buy said sales dropped 1.6 percent in its domestic big-box stores and 8.2 percent internationally, and said it would not be providing earnings forecasts for this fiscal year as it has in the past.
The company's share price fell 6.4 percent in early trade to $17.00, leaving it down more than 27 percent since the beginning of the year.
Net earnings in the three months ended August 4 came in at $12 million, compared with $128 million a year earlier. For the half-year, earnings were down 50 percent to $170 million.
Earnings per share for the quarter were four cents, compared with 34 cents in the second quarter of 2011 and far below expectations. Half-year EPS was 50 cents, down from 89 cents.
Margins slipped slightly but the company said its domestic market share was stable, helped by a 14 percent growth in revenue in US online sales.
Best Buy has been closing some stores and revamping its sales tactics, including pushing into Internet marketing, as it fights to survive the growth of on-line sales of electronics.
On Monday, one day after announcing that talks on former chairman Richard Schulze's proposal to buy the company and take it private had broken down, Best Buy named Hubert Joly, previously head of travel group Carlson, to lead the company.
Joly "has developed a track record of successful turnarounds and growth in the media, technology and services sectors," Best Buy said in a statement.
The company said Tuesday it was suspending the issuance of earnings guidance, but said annual earnings expectations were reduced "due to lowered expectations for industry-wide sales and the uncertainty associated with several key product launches expected in the second half of fiscal 2013."
"The company continues to expect to achieve its domestic market share goals for the fiscal year," it added in a statement.