1 & Only B&M / Online Retailers News Thread

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via Star Tribune

Best Buy reports 3rd-quarter loss on restructuring charges, slumping sales

MINNEAPOLIS - Best Buy Co. says it recorded a loss in the third quarter, hurt by a continued sales slump and charges related to its restructuring plan. Shares fell 6 percent in premarket trading.

The struggling electronics chain reported a loss of $10 million, or 3 cents per share. That compares with net income of $156 million, or 42 cents per share in the prior year period. Excluding one-time items, net income totaled 3 cents per share. Analysts expected 13 cents per share.

Revenue fell 4 percent to $10.75 billion. That matched analyst expectations.

The company said previously it expected third-quarter results to decline significantly. Last week CEO Hubert Joly outlined a plan to improve results via beefing up customer service and revamping stores while at the same time cutting costs.

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via Star Tribune

Best Buy 4th quarter loss narrows
Article by: Associated Press

NEW YORK - Best Buy Co. said Friday that its fourth-quarter loss narrowed as better sales in the U.S. helped offset weakness abroad, particularly China and Canada.

The electronics chain also says a deadline passed without a bid from its co-founder, Richard Schulze, who had been weighing making an offer.

The financial results beat expectations and shares rose more than 5 percent in premarket trading.

Under new CEO Hubert Joly, Best Buy has been working to turn around results as it faces tough competition from online retailers and discounters. It has invested in training employees and implemented a price matching policy.

The results show that Best Buy's new management is making progress, said NBG Productions analyst Brian Sozzi.

He said there are "striking positives" in the results, including better-than-expected gross margin — the percentage of each dollar in revenue a company actually keeps — and an 11.2 percent increase in U.S. online sales.

"Every transaction online was essentially the equivalent of convincing groups of previously disenchanted customers that yes, Best Buy is finally price competitive," Sozzi said.

Earlier this week Minneapolis-based Best Buy announced 400 job cuts at its headquarters as part of a $725 million cost-cutting plan. On Friday the company said it expects to announce more job cuts later this year.

The company also said it plans $700 million to $800 million in capital spending and $150 million to $200 million in other expenses in fiscal 2014 as it invests in its business, mainly online and mobile channels. It plans to revamp Bestbuy.com by fiscal 2015.

Its loss after paying preferred dividends for the three months ended Feb. 2 totaled $409 million, or $1.21 per share, for the three months ended Feb. 2. That compares with a loss of $1.82 billion, or $5.17 per share, in the prior-year quarter.

Excluding restructuring and other costs, adjusted earnings came to $1.64 per share. Analysts expected $1.54 per share, according to FactSet.

Revenue was nearly flat at $16.71 billion, from $16.67 billion last year. Analysts expected $16.29 billion.

U.S. revenue in stores open at least one year rose 0.9 percent, helped by performance from Best Buy's standalone mobile stores. International revenue in stores open at least one year fell 6.6 percent due to weak results in Canada and China.

Best Buy also absorbed restructuring charges of $203 million related to closing stores and severance. It took an $822 million impairment charge to write off worse than expected results in Canada and China as well as $44 million in asset impairments.

"Renewed momentum in the domestic business more than offset continued softness in the International business," Joly said.

For the year, the loss totaled $249 million, or 73 cents per share. That compares with a loss of $1.32 billion, or $3.57 per share, in the prior year.

Revenue edged down less than 1 percent to $49.62 billion from $50.04 billion.

Looking forward, CFO Sharon McCollam said she expects first-quarter results to be "under significant pressure" because there will be a week less of sales compared with last year. Also, people buying TVs before the Super Bowl benefited the fourth quarter this year, compared with the first quarter last year. That helped net income by 14 cents per share in the fourth quarter.

The company is also making investments during the quarter in a price-matching program and revamping its websites.

Schulze, who founded the company in 1966 and is its largest shareholder by far with a 20 percent stake, had been considering a bid or selling his stake since resigning in June, following an investigation that led to the resignation of CEO Brian Dunn due to an inappropriate relationship with a female staffer.

Schulze was given until Feb. 28 to make an offer for the company, but no offer materialized, Best Buy said Friday.

Shares rose 84 cents, or 5.1 percent, to $17.25 in premarket trading. The stock has traded between $11.20 and $27.95 over the past 52 weeks.

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Missed this from a couple days ago...
via Home Media Magazine

Best Buy Narrows Fourth-Quarter Loss
1 Mar, 2013

Chain downsizing packaged media shelf space going forward

Best Buy Co. March 1 reported a fourth-quarter (ended Feb. 2) net loss of $409 million, compared with a loss of $1.8 billion during the previous-year period. Domestic revenue reached $12.6 billion, down 0.3% from last year.

Domestic operations generated operating income of $649 million, down 27% from operating income of $888 million last year.

The decline was driven by the loss of revenue from 49 big-box stores that were closed earlier in the year, but was offset by a positive 0.9% same-store sales increase and incremental revenue from 126 new Best Buy Mobile standalone stores.

The CE chain also benefited from an increase in pre-Super Bowl sales, as the annual football game occurred during Q4 unlike the same period last year. At the same time, the timing of the game will negatively impact first-quarter revenue going forward, Best Buy said.

Domestic online sales increased 11.2%, reaching a record $1.3 billion. Best Buy said the recently enacted price-matching guarantee and related shipping policies (order online, pick up at local store) were “high-effective” traffic generators that drive the better-than-expected results.

Principal product categories included mobile phones, tablets, e-readers and appliances, partially offset by declines in video games and digital imaging.

Best Buy said it will restructure bestbuy.com during the next 24 months, including better marketing of the previously announced price-matching online and in stores against major competitors. The winter holiday promotion becomes permanent March 3.

The company expects to shutter five to 10 big-box stores domestically while opening 12 smaller footprint Best Buy Mobile, 10 Magnolia Design Center stores, and 18 to 25 Pacific Kitchen & Home store-within-a-stores.

Entertainment same-store sales, which included music, movies and video games, fell 19%, up 1% from a decline of 18% during the previous-year quarter. The segment represented 12% of Best Buy domestic sales compared with 15% last year.

In a call with analysts, CEO Hubert Joly said Best Buy would downsize shelf space of packaged media. The shift in strategy will not impact Best Buy CinemaNow, including early and street date access to electronic sellthrough of new-release movies — many with UltraViolet functionality.

“We will reduce space allocated to the negative growth and low margin CD and DVD categories and replace it with higher gross categories like mobile, appliances and accessories and to support these expanded categories, we will deepen the product assortment, increase Blue Shirts training and we prioritize marketing investments,” Joly said.

Finally, the CEO acknowledged that no buyout offer was received from founder Richard Schulze by the Feb. 28 midnight deadline.

Joly said that during the prolonged discussions with Schulze, the former chairman introduced three private equity investors who sought to obtain board seats in exchange for a $1 billion investment in Best Buy. The CEO said the costs of these investments would be excessive and dilutive to existing shareholders.

“Therefore, [Best Buy] concluded to not accept these offers,” Joly said. “Despite the significant amount of time that management has spent on this process, the organization has remained focused … as we move forward for the benefit of all of our stakeholders.”

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via Home Media Magazine

Hastings Entertainment Posts $1.2 Million Q4 Profit
18 Mar, 2013

Southwest retailer reverses previous-year loss via increased disc sellthrough and new product categories

Hastings Entertainment March 18 reported fourth-quarter (ended Jan. 31) net income of $1.2 million, compared with a net loss of $8.4 million during the previous-year period.

Amarillo, Texas-based Hastings narrowed same-store movie sale declines to 0.8% for the quarter, compared with a 10.7% drop last year. This was primarily due to decreased sales in used and previously viewed movies, and partially offset by increased sales in new DVD and Blu-ray Disc titles, as well as DVD boxed sets.

Overall rental comps, which include video games, decreased 10.1% during the quarter, primarily due to fewer rentals of DVDs and video games, partially offset by an increase in rentals of Blu-ray movies. Movie rental comps dropped 7.7% for the fourth quarter, an improvement from the first three quarters of the year in which comps decreased 11.6%.

Video game comps, which are impacted by the longevity of the current console cycle, decreased 27%.

Rental revenue topped $15 million and represented 11% of total revenue, which was down $2 million (11.5%) from rental revenue of more than $17 million last year. Movie rentals continue to be negatively affected by Redbox kiosks and subscription-based rental services such as Netflix, Amazon Prime Instant Video and Hulu Plus.

Retail sales, which include discs, games, consumer electronics, music, café and trend, reached $126 million — down 6.8% from sales of $135 million during the previous-year quarter.

“Our revenue continues to be negatively impacted by the increasing popularity of digital delivery, rental kiosks and subscription-based services, as well as the longevity of the current video game console cycle,” founder and CEO John Marmaduke said in a statement. “In spite of lower revenues, our pre-tax profit for the fourth quarter increased over the fourth quarter of the prior year. Further, we reduced our pre-tax loss for the fiscal year by $3.7 million, or 29%, compared [with] the prior year.”

Hastings is added new product categories in 44 of its 137 superstores, including consumer electronics, music electronics and accessories, hobby, recreation and lifestyle, vinyl and tablets. These new categories helped drive fourth-quarter revenue 15.1% in consumer electronics.

“We are dedicating approximately 600 linear feet per store to these categories and also increasing linear footage for trends including apparel, kids and seasonal categories, along with a reduction in footprint dedicated to rental, music and books,” Marmaduke said.

Hastings plans to shutter eight underperforming stores when their leases expire in August.

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http://news.yahoo.com/best-buy-repor...112730221.html

Best Buy reports 1Q loss on restructuring costs

MINNEAPOLIS (AP) — Best Buy Co. is reporting a loss in its fiscal first quarter as it sold its stake in Best Buy Europe and works on a turnaround plan that includes cutting costs and closing some stores.

The electronics retailer says net loss for the three months ended May 4 after paying preferred dividends totaled $81 million, or 24 cents per share. That compares with net income of $158 million, or 46 cents per share, last year.

Excluding restructuring costs and costs related to selling its stake in Best Buy Europe, net income from continuing operations totaled 32 cents per share. Analysts expected 24 cents per share.

Revenue fell nearly 10 percent to $9.38 billion, short of expectations of $10.67 billion.

Best Buy's stock fell 3.4 percent to $25.90 in premarket trading.

http://www.homemediamagazine.com/has...-q1-loss-30476

Hastings Posts $2.2 Million Q1 Loss
20 May, 2013

Southwest retailer cites digital distribution, kiosks and SVOD for decline in home entertainment rental revenue

Hastings Entertainment May 20 reported a first-quarter (ended April 30) net loss of $2.2 million, compared with net income of $800,000 during the previous-year period. Revenue dropped 5.5% to $109.1 million, compared with $115.5 million last year.

Same-store rental revenue dropped 9%, primarily due to fewer rentals of DVDs and video games, partially offset by an increase in rentals of Blu-ray movies. Rental video comps decreased 7.4% and continue to be impacted by rental kiosks and subscription-based rental services.

Meanwhile, same-store movie sales increased 3.9%, primarily due to strong sales in new DVDs, Blu-ray Disc and boxed sets and an overall stronger slate of new releases as compared with the first quarter of fiscal 2012.

Hastings, which operates 134 retail stores throughout the Southwest, said it restructured operations at the corporate level, which included staff reductions, department consolidation and the termination of four of its eight corporate officers. The total cost of this restructuring was about $1.4 million.

“Our revenue continues to be negatively impacted by the popularity of digital delivery, rental kiosks and subscription based services, as well as the longevity of the current video game console life cycle," CEO John Marmaduke said in a statement.

As a result Hastings is expanding rollout of new product categories, which include consumer electronics, music electronics and accessories, hobby, recreation and lifestyle, vinyl and tablet computers, according to Marmaduke.

The new products helped grow the electronics category’s same-store sales 18.4% in the quarter, compared with a 13.1% sales increase in the first quarter of fiscal 2012.

The sales increase in electronics was driven by the expansion (“reset”) of the category in select stores. To date, nearly 44 stores have expanded their electronics category.

“We are encouraged by the performance of these new products and plan to reset 60 stores during fiscal 2013, which will give us a total of 104 stores by the end of fiscal 2013,” Marmaduke said, adding that the chain continues to see sales increases in its trends and Hardback Cafe categories.