Weak television and consumer electronics sales conspired to crush Best Buy’s fiscal third quarter.
Best Buy (NYSE:BBY) reported fiscal third quarter earnings of $217 million, or 54 cents a share, on revenue of $11.89 billion. Wall Street was expecting earnings of 61 cents a share on revenue of $12.45 billion.
What happened? Best Buy said sales of TVs and mobile computing products—notebooks—came in lower than expected. Indeed, same store sales were down 3.3 percent in the third quarter. In the U.S. same store sales at Best Buy were down 5 percent.
A low double-digit same store decline in TVs, entertainment hardware and software crimped Best Buy’s quarter. Mobile phone and tablet computer sales were decent, but overall Best Buy struggled. Competition also hampered Best Buy as the company competes with Wal-Mart and other electronics retailers such as HH Gregg, which has taken over many locations formerly owned by Circuit City.
Best Buy said in a statement:
The company estimates that its domestic market share declined 110 basis points versus the comparable period last year for the three months ended October 31, 2010. The decline was driven primarily by declines in TVs, mobile computing and gaming software. Based on fiscal year-to-date trends, the company now estimates that its domestic market share will decline for the full fiscal year as compared to the prior fiscal year.
Best Buy projected fiscal 2011 earnings of $3.20 to $3.40 a share. Wall Street was expecting $3.59 a share.
Here’s a look at the moving parts: