NEW YORK — Best Buy Co. reported another dismal quarter on Tuesday, recording a third-quarter loss and continued sales slump just as the crucial Christmas shopping season revs up.
Adjusted for restructuring charges, it earned 3 cents per share, well below analysts’expectations. The news sent shares down 13 percent to their lowest level in more than two decades.
“Best Buy’s third-quarter financial performance was clearly unsatisfactory,” said Chief Executive Officer Hubert Joly, the turnaround expert tapped to lead Best Buy in August.
The electronics chain is trying to reverse a years-long decline in its business as competition from online stores and discounters increases, and consumers’ tastes shift from more profitable items such as TVs and desktop computers toward less profitable smart phones and tablets.
In addition, it’s facing a growing number of consumers who are “showrooming,” or going to Best Buy stores to check out merchandise but buying it elsewhere.
Best Buy’s co-founder and former Chairman Richard Schulze and private-equity firms continue to evaluate the chain for a possible buyout.
Best Buy said last month that third-quarter results would be “significantly” below last year’s.
“They said they were going to produce lousy results, and they didn’t disappoint - they produced lousy results,” said Erik Gordon, a business and law professor at the University of Michigan. “It gives the Schulze gang ammo to say Best Buy is lost.”
Last week at an analyst meeting, Joly outlined a plan to improve results via beefing up customer service and revamping stores while at the same time cutting overhead and supply-chain costs.He also has restructured top management and hired a new chief financial officer.
“The results we are reporting today only strengthen our sense of urgency and purpose,” Joly added.
But the quarterly results show Best Buy has a long way to go to turn things around.
The Minneapolis company reported a loss of $10 million, or 3 cents per share, for the three months ended Nov. 3.That compares with net income of $156 million, or 42 cents per share in the prior year period.
Excluding one-time items, earnings totaled 3 cents per share. Analysts expected earnings of 13 cents per share, according to FactSet.
Revenue fell 4 percent to $10.75 billion from $11.15 billion but still matched analysts’ expectations.
Revenue in stores open at least one year continued to slide, down 4.3 percent for the quarter. The measure is an important gauge of a retailer’s financial health because it excludes results from stores that open or close during the period.
Sales growth in mobile phones, appliances and tablets and e-readers was offset by weakness in notebookcomputers, video games, digital cameras and TVs.
Shares fell $1.79 to close at $11.96 after falling as low as $11.74 in earlier trading. That is the lowest since November 1988, according to FactSet.
The quarter had some quarter-specific factors that hampered results, Joly said, including customers delaying purchases ahead of new product introductions such as the new Windows 8 operating system and several new smart phones and tablets.
In addition, the company faced higher costs for training employees and executive transition expenses.
“We do not believe that the rate of decline that Best Buy experienced in the third quarter can be extrapolated in any way,” he said in a call with analysts.
Best Buy also outlined its plans for a successful Christmas shopping season, including allowing its floor staff to match online prices and paying bonuses to the best performing salesmen.
But ITG analyst John Tomlinson said results for the fourth quarter will be key to see if Joly’s plans for the company will pay off.
“He’s saying the right things about what Best Buy’s problems are, but the devil is in the details,” Tomlinson said. “Until you actually see the sales lift and benefit from those investments, most investors are going to take a wait-and-see-type approach.” Information for this article was contributed by Chris Burritt of Bloomberg News.
Business, Pages 21 on 11/21/2012