An outperformer among retailers, Best Buy joined the pack with a weak profit forecast, and its star CFO is stepping down. Fred Katayama reports.
Best Buy had been bucking the retail trend, but now it has joined the pack. The electronics retailer issued a weak profit forecast for the current quarter. It partly blamed the April earthquake in Japan, saying it had disrupted inventory in the profitable area of digital imaging products. Best Buy's CFO Sharon McCollam, who announced she's stepping down next month, said the retailer expects a slight decline in revenue in the first half followed by growth in the second half, resulting in flat revenue. BB&T Capital markets analyst Anthony Chukumba said, "We are concerned by McCollam's impending departure, as we view her as ... one of the most talented retail executives in the U.S. today." Sales at Best Buy's existing U.S. stores was flat in the latest quarter. Appliances, home theater, and wearable devices saw strong demand. But weak sales of mobile phones and tablets offset that. The soft profit outlook and the CFO's departure masked some positive points in the last three months: a big profit increase and comparable sales that beat expectations. Best Buy shares, which vastly outperformed the S&P 500 with a nearly ten percent gain this year, dropped in early trading.