Best Buy has warned over its current quarter, sending its share price tumbling
US electronics chain Best Buy has said it's current quarter is going to come in below analyst expectations.
The company has blamed disruption in supply after an earthquake in Japan caused chaos with production of some high-margin products, as well as investment in services launched last September dragging on earnings.
The news, coming ahead of the open in the US, sent shares over five per cent lower in pre-market trading.
For the first quarter the retailer posted profits up 18 per cent to $229m (£158m), or 70 cents per share. Excluding items, the company earned 44 cents per share.
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Revenue fell 1.3 per cent to $8.44bn. Analysts had expected earnings of 35 cents a share on $8.29bn in revenue.
In the first quarter last year the company posted earnings of $129m, or 36 cents a share.
Best Buy has spooked investors by forecasting an adjusted profit of 38-42 cents per share in the second quarter. A Reuters poll showed analysts were expecting 50 cents per share.
Rival retails in the US are also struggling as the economy continues to battle low inflation.
For the full year the company has pencilled in flat revenue. Best Buy Chief Executive Hubert Joly said:
The first quarter represents less than 15 per cent of full year earnings and at this stage we have no new material information as it relates to product launches throughout the year.
Causing further uncertainty was the news that chief financial officer Sharon McCollam is to step down on 14 June.
Corie Barry, currently chief strategic growth officer and a 16-year veteran of Best Buy, will step into the role though McCollam will remain with the company in an advisory capacity until the end of the year.
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Best Buy has been working to cut costs recently and has been boosted by an uptick in sales for appliances and home theatre equipment as the US housing market recovers.
New gadgetry coming onto the market, such as wearables like fitness tracker Fitbit, has offset its slowing mobile phone and tablet division.