- 13Sep
(Reuters) - Best Buy Co Inc's reported lower-than-expected quarterly results as shoppers held off on buying televisions and other nonessential items in the anemic U.S. economy, and its shares fell nearly 8 percent.
The world's largest consumer electronics chain's lackluster results on Tuesday highlighted the fragility of recovery in the world's largest economy. (For a graphic on Best Buy's earnings, clickr.reuters.com/nuf73s )
Best Buy is also a victim of a lackluster product cycle and cut-throat competition from chains such as Wal-Mart Stores Inc and Internet retailers like Amazon.com Inc.
Amazon's prices on televisions remain 12 percent to 14 percent below Best Buy's, Deutsche Bank analyst Mike Baker said recently.
"People are savvy and will comparison shop online," Wedbush analyst Michael Pachter said. "There's nothing Best Buy can do except lower its cost structure by getting out of big-format real estate and open some smaller stores."
Best Buy has now decided to offer products online from other sellers through its new third-party Marketplace as it tries to better compete with Amazon and online auctioneer eBay Inc.
The retailer, seen as a bellwether in consumer electronics, said its second-quarter sales were essentially flat at $11.3 billion. Analysts expected about $11.5 billion.
Sales at stores open at least for 14 months fell 2.8 percent in their fifth straight quarterly decline.
The results echoed those from smaller rival hhgregg Inc as well as office supply chains Office Depot Inc and OfficeMax Inc, which reported weak sales of technology products in the key back-to-school season.
Still, Best Buy said it still expected full-year revenue of $51.0 billion to $52.5 billion.
Second-quarter net profit fell to $177 million, or 47 cents a share, from $254 million, or 60 cents a share, a year earlier. Analysts on average were expecting 53 cents a share, according to Thomson Reuters I/B/E/S.
Shares of Best Buy were down 7.7 percent at $23.04 in morning trading.
(Reporting by Dhanya Skariachan and Liana Baker, editing by Gerald E. McCormick, Dave Zimmerman, Lisa Von Ahn)
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