New York, August 22 (FinanceEnquiry.com) – The woes of the Best Buy (NYSE: BBY) have been increasing day by day. On Tuesday, the company withdrew its full-year earnings guidance. The company blames restructuring charges and weak sales as the basic reasons behind the second quarter’s 90 percent drop in net income.
The company’s revenue skidded around 3 percent whereas the revenues at the stores skidded 3.2 percent. Revenue in domestic market slumped 1.6 percent and in international market 8.2 percent.
The news of drop in profit came the day later as on Monday, Hubert Joly was appointed as the CEO and President of the company. He is expected to take the charge in September and the it is expected that that he will turn around the company. Though, Wall Street didn’t welcome the decision and the shares of the company fell 10 percent.
Since April, the company has been in news due to controversies. Former CEO Brian Dunn resigned in April as he was accused for having improper relationship with a female employee. Even Schulze had to put down his papers, as after the probe it came to light that he was aware about the relationship and failed to raise the alarm.
The profits of the company started declining as customers started browsing them for electronics and then buying them from somewhere else. Consumers are now more inclined towards smaller gadgets as compared to bigger ones.
In March, the company closed 50 stores, laid off 400 jobs and trimmed $800 million in costs as a part on its restructuring regime.
On Tuesday, shares of Best Buy fell 1.4 percent to close at $17.91.
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