Best Buy shares fall on earnings warning, management shake-up
Struggling electronics retailer announces departure of two key executives while warning that its upcoming third-quarter results will be "significantly below" last year's.
Shares of Best Buy declined in after-hours trading after the electronics retailer announced a management shake-up and issued a warning about its upcoming third-quarter results.
Best Buy announced today that two executives, including its U.S. president, would be leaving the company as part of a restructuring effort. U.S. business President Mike Vitelli will retire at the end of the current fiscal year in February 2013, while Tim Sheehan, executive vice president of U.S. operations, will leave the company at the end of the month.
Best Buy also warned that its net income for the third quarter will be "significantly below" last year. It also predicted that same-store sales figures would decline. Best Buy reported in August that it earned $33 million in the second quarter ended August 4, down 87 percent from a year earlier.
Shares fell 6.8 percent in after-hours trading to $15.77.
The moves are the first structural changes initiated under new CEO Hubert Joly, who was touted as a turnaround specialist when he was hired in August to resurrect the fortunes of the struggling electronics giant.
The Richfield, Minn.-based company is also the target of an unsolicited effort to take it private by company co-founder Richard Schulze, who was ousted as chairman earlier this year in the wake of a scandal involving the previous chief executive.
Best Buy said today it would hold an investor day on November 1 to discuss Joly's plans for the future.
