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| Best Buy suspends profit forecast as earnings decline | Best Buy suspends profit forecast as earnings decline |
| (40 minutes later) | |
| Struggling US electronics chain Best Buy has reported a dramatic fall in profits. | Struggling US electronics chain Best Buy has reported a dramatic fall in profits. |
| Net profits plunged to just $12m (£7.6m) on revenues of $10.6bn in the second quarter. Profits were $150m in the same period a year earlier. | Net profits plunged to just $12m (£7.6m) on revenues of $10.6bn in the second quarter. Profits were $150m in the same period a year earlier. |
| The profit fall was exacerbated by a $91m one-off charge, primarily related to cost of closing stores. | The profit fall was exacerbated by a $91m one-off charge, primarily related to cost of closing stores. |
| Best Buy said uncertainty over its future sales meant it could not provide any guidance on its full-year profits. | Best Buy said uncertainty over its future sales meant it could not provide any guidance on its full-year profits. |
| The company, which owns 50% of UK-mobile phone chain Carphone Warehouse, has also suspended share buybacks. | The company, which owns 50% of UK-mobile phone chain Carphone Warehouse, has also suspended share buybacks. |
| The two opened 11 Best Buy outlets in the UK in 2010, but they all closed a year later. | The two opened 11 Best Buy outlets in the UK in 2010, but they all closed a year later. |
| Declining sales | Declining sales |
| Best Buy's shares, which have lost almost 70% since their peak of $56.66 in May 2006, fell another 4% after the latest financial results. | Best Buy's shares, which have lost almost 70% since their peak of $56.66 in May 2006, fell another 4% after the latest financial results. |
| The firm is struggling to compete with online rivals such as Amazon which are able to sell goods cheaper. | The firm is struggling to compete with online rivals such as Amazon which are able to sell goods cheaper. |
| In March, Best Buy announced a major restructuring that included closing 50 stores, cutting 400 corporate jobs and trimming $800m in costs. | In March, Best Buy announced a major restructuring that included closing 50 stores, cutting 400 corporate jobs and trimming $800m in costs. |
| Despite these changes, sales have continued to fall. | Despite these changes, sales have continued to fall. |
| Sales at stores open at least 14 months fell 3.2% in the three months to 4 August, including a 1.6% drop in the US and an 8.2% fall in international sales. | Sales at stores open at least 14 months fell 3.2% in the three months to 4 August, including a 1.6% drop in the US and an 8.2% fall in international sales. |
| This means same-store sales have now fallen in eight out of the past nine quarters. | This means same-store sales have now fallen in eight out of the past nine quarters. |
| Expensive showroom | Expensive showroom |
| The firm said on Monday that talks with the firm's founder, Richard Schulze, over taking the company private had broken down. | The firm said on Monday that talks with the firm's founder, Richard Schulze, over taking the company private had broken down. |
| Best Buy said that Mr Schulze had rejected an offer to conduct due diligence on the deal. | Best Buy said that Mr Schulze had rejected an offer to conduct due diligence on the deal. |
| Mr Schulze, who owns just over a fifth of Best Buy, had wanted to buy the rest of the chain for between $24 and $26 a share. | Mr Schulze, who owns just over a fifth of Best Buy, had wanted to buy the rest of the chain for between $24 and $26 a share. |
| He said he was "shocked" and "disappointed" that discussions over a possible buyout had broken up. | He said he was "shocked" and "disappointed" that discussions over a possible buyout had broken up. |
| Best Buy has been trying to cut costs to improve its profit margins. | Best Buy has been trying to cut costs to improve its profit margins. |
| It said in June that one of its priorities was to stop its large stores simply becoming a showroom, where shoppers browse electronic products, but then buy them cheaper online. | It said in June that one of its priorities was to stop its large stores simply becoming a showroom, where shoppers browse electronic products, but then buy them cheaper online. |
| Best Buy has seen annual declines in revenue at stores open at least a year for two of the last three years. | Best Buy has seen annual declines in revenue at stores open at least a year for two of the last three years. |