Report: Best Buy On The Ropes
October 25, 2012 at 4:46 PM (PT)
One of the nation's leading brick-and-mortar CD sellers, BEST BUY, is on very shaky footing. FORBES reports that BEST BUY has erased an entire layer of management -- before it issued a weaker-than-expected forecast for third-quarter results.
U.S. business Pres. MIKE VITELLI will leave in early FEBRUARY, as will another TIM SHEEHAN, but that hasn't mollified analysts who are down on the retail chain. "While we applaud the aggressiveness of all of these changes," RBC CAPITAL MARKETS‘ SCOT CICCARELLI said. "It remains to be seen if these changes can successfully improve the company’s financial performance over time."
"While we were already bearish on BEST BUY’s fundamentals heading into the third quarter, we find this pre-announcement indicative of significant operational and macro challenges that exceeded even our weak expectations," BARCLAYS analyst ALAN RIFKIN added. "This is especially troubling given that we are heading into the critical holiday selling season over the next two months."
Shares of BEST BUY fell 10% in late afternoon trading.