Best Buy Misses Earnings Estimates, Closing 50 Stores
In the latest earnings report for Best Buy released Thursday morning, the company shows that they have suffered another loss in Q4 fiscal 2012. This shows that Best Buy has missed not only this quarter, but also the last two previous quarter estimates from Wall Street. This is a bad sign for the retail store, as online shopping companies like Amazon and Costco excel in earnings.
The results show that Best Buy brought in $16.6 billion, which is less than the estimated $17.15 billion. Due to the missed results, Best Buy has some work to do in making their business model more profitable. One of the ways they plan on doing that is by closing the doors of some 50 U.S. stores, putting hundreds of people out of work.
Best Buy CEO Brian J. Dunn said the following regarding the earnings miss;
In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance, As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints — closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations — all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability.
Others speculate how Best Buy should be improving their business, which doesn't reflect on the sales of the stores directly, but more in simple customer satisfaction at the retail outlets. having staff who are more able to assist in fielding questions on technology from customers is a step in the right direction, not simply someone who wears a blue shirt and knows how to stock shelves. This seems to be where other retail stores like Apple and GameStop are great for customers, and where Best Buy scores low in overall satisfaction.
Source - Best Buy
Image - Mashable