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NEW YORK (AP) — Best Buy Co. Inc. withdrew its full-year earnings forecast after reporting a 90 percent drop in net income during the second quarter, which was dragged down by restructuring charges and weak sales.
Best Buy released quarterly results a day after naming Hubert Joly, former CEO of the Carlson travel company, as its new CEO. The chain is in the midst of a very public fight with its former chairman and co-founder, Richard Schulze, who wants to take the company private.
During a conference call, interim CEO Mike Mikan spelled out the challenges faced by Best Buy and said that Joly is up to the task.
Q. What are some of the big hurdles you face and why do you think the new president will be able to spearhead a turnaround?
A. Hubert brings tremendous experience to the job...He's got local roots but he's also got a great deal of international experience and he has specific experience in corporate turnarounds, exactly what Best Buy needs at this moment.... Over the last three months, Best Buy's management team has worked to define opportunities, initiatives and actions to move the company forward.... Hubert will inherit a good deal of advanced work....
As we've been discussing for some time now, the company continues to face significant challenges. As is widely known, markets in China and Europe are facing enormous difficulties and that has had a negative impact...In the U.S., economic conditions are soft and will probably remain so for the indefinite future. Consumers remain very cautious and sales in the industry may be dampened at the moment by those who are holding back on spending as they await some highly anticipated new technology releases.
Like virtually every other competitor in the consumer electronics sector, Best Buy's second quarter reflects these realities. However, we have made progress.