Best Buy earnings plummet 77%, will offer buyouts to employees
Best Buy reported on Tuesday its earnings for Q3 2008 which, despite a strong Black Friday showing, were abysmal. Best Buy pulled in a meager $52 million in earnings or 13 cents per share which is a 77% drop from the same quarter last year during which Best Buy raked in earnings of $228 million, or 53 cents a share. Best Buy did not even come close to meeting Wall Street’s expected earnings of 24 cents per share which were adjusted downward from Q3 2007 to reflect the slowdown in the economy. As result of this poor Q3 2008 showing, Best Buy CEO Brad Anderson has announced that Best Buy will be offering voluntary buyouts to all 4,000 of its employees. If a sufficient number of buyouts are not taken, then layoffs may ensue. In addition to cutting back on its workforce, Best Buy also plans on cutting expenditures in half and delaying new store openings. Not so good end of the year news for Best Buy and its employees but as always, we feel for all of those who will be affected by this announcement.
Thanks, Likeabite!
@DC:
I guess you missed that this is the original “tipster”. He’s defending his ‘tip”, I guess in some attempt to appear relevant or important or whatever for future such “tips”.
@ Dark Cobra…I did not say the two were the same…I said they were both reported because they were both news. PERIOD. You guys are making it sound like because Best Buy’s applying for bankruptcy and the economy is doing bad then it is ok. The fact of the matter is it’s not ok. If it was ok they would not be contemplating layoffs if people do not take the buyouts. Yes the economy is bad for all the other businesses out there but do you think Circuity City would’ve filed for bankruptcy if the economy was good? The answer is no and that applies for the countless others that have had went under. If a company does starts doing bad in an economic downtown like this do you know what follows? Just ask Circuit City…Best Buy is not known for having the best prices in the world either…just look at the comments and compare them to online retailers like Amazon/Ecost/Newegg. That said, this is not to say that they will be filing for bankruptcy but the tone of the article was not as harsh as it is being depicted, especially in an economy where financial institutions and retailers are crumbling left and right. It a couple of months (hopefully not)just ask those that were laid of if this article was harsh or not and there’s your answer.
and @ DavidB I’m not defending my tip…you’re missing the point because the news came straight from CNet. You’re talking as if it’s a first hand account and I work in a corporate office or something. I have nothing to gain from the defense. I’m just a realist.
Dark Cobra sounds like he must be a shareholder dong his best to pump the stock back up. Bottom line is the Company missed its earnings targets big time and now needs to cut jobs. I’m sure Circuit City had double digit profit once but trended down, then negative.
I can’t believe I sat here and read this entire post…but it was like a train wreck, you want to look away but you just can’t…
Here’s the deal, as an employee of Best Buy, I can honestly say that the stores aren’t doing too badly. Take a look at any electronics store, we don’t sell a damn thing that anybody needs…not a DAMN thing. We sell luxuries and people are still buying. People don’t come to our stores just to mill around and look at the things they don’t want…they come in to either buy something, get information, or price shop. Many of our stores exceed their revenue budgets on a daily basis, most hitting 90-100% revenue goals…which is a comp up of anywhere between 8-20% from last year….that’s increased revenue guys.
Reduced consumer spending, although playing a small part in reduced proficts, wasn’t the main problem. Our problem was actually having items to sell. The banking crisis hurt us, we couldn’t get enough items in stock to actually keep them on the shelves. Our lenders are probably kicking themselves in the ass right now after realizing that they would have made money if they just lent us the money to buy merchandise. In fact, we know it’s happening because all the items we’d been begging for over the last month and a half are suddenly showing up by the truckload.
Before I end this let me squash the price gripers. Of course Best Buy has higher prices when compared to online stores…think about it…we have overhead. We are a big box store, we don’t hide behind a warehouse and website. If people want to see something they can come in, test it out, and buy it. Contrary to popular opinion, most people out there need guidance when buying products…it is not our intention to misguide customers or to cram warranties down their throats. Every store has it’s rockstar employees and their crappy employees…there’s no way around this. And, at least we pay the good ole’ US taxes on our products…you buy online, the items are tax free, that’s increased profits for those online stores. It’s no better than those bastard Tax Attorneys that brag about cutting someones tax debt by half. Man up and pay your debts, pay tax, support the little guy.
And remember, if you don’t like Best Buy, don’t shop there.