NEW YORK — It’s called Best Buy, but is the name an empty promise? The nation’s biggest electronics retailer had performed relatively well throughout the economic downturn, in part by touting its customer-service prowess and because shoppers were snapping up new smartphones and notebook computers as soon as they hit shelves.
But on Tuesday, Best Buy posted a second- quarter profit that plunged 30 percent and sales that missed Wall Street estimates. The company lowered its forecast for the year as new smartphone and notebook launches slowed and customers continued their exodus from its big-box stores to shop for deals on electronics at online retailers, discount stores and specialty chains.
“The consumer is willing to trade customer service for the best possible price,” said Brian Sozzi, a Wall Street Strategies analyst. “Their problems aren’t going away; if anything, they’re accelerating.”
When its rival Circuit City went out of business about a year ago, Best Buy reaped the benefits of being the biggest kid on the block. But Tuesday’s results show Best Buy is being hurt by Americans’ continuing worries about the global economy. They’re cutting back on discretionary purchases of TVs and looking for discounts at retailers such as Wal-Mart when they do buy. They also increasingly dislike the unwieldiness of big- box stores, preferring instead to shop online at or in smaller specialty stores such as GameStop.
Best Buy Co.’s net income fell to $177 million, or 47 cents a share, for the three months ended Aug. 27, down from $254 million, or 60 cents a share, in the same period last year. Revenue edged up to $11.35 billion.
