Best Buy plans big cuts as profit drops
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MINNEAPOLIS -- — Best Buy Co. offered voluntary severance packages to virtually all its 4,000 corporate employees Tuesday as the nation’s largest consumer electronics chain announced its third-quarter profit skidded 77%.
The results, which beat Wall Street’s lowered expectations, came in what the company called the “most challenging consumer environment” in its history.
Best Buy shares rose $4.21, or 18%, to $27.68.
The company earned $52 million, or 13 cents a share, in the quarter ended Nov. 29, down from net income of $228 million, or 53 cents, a year earlier.
Excluding a charge related to a decline in market value of its 2.9% stake in British company Carphone Warehouse Group, the company’s profit came to 35 cents a share.
Revenue climbed 16% to $11.5 billion from $9.93 billion a year earlier.
Best Buy plans to cut capital spending 50% in 2009.
The chain plans to open “significantly” fewer stores in the U.S., Canada and China next year.
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