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Best Buy ‘on Track’ to Meet Annual Plan, Interim CEO Says

Best Buy Co. interim Chief Executive Officer Mike Mikan said the consumer-electronics retailer is “on track” to deliver on its annual plan and will focus more on training employees.

Best Buy has “work to do,” Mikan said today at the company’s annual shareholder meeting at its headquarters in Richfield, Minnesota.

The company plans to spend more on training, enabling workers to sell to consumers who are now using its stores to compare prices and then buy from online rivals. Getting customers to understand consumer electronics “will help us ensure that sales take place with us and not with others,” Mikan said, calling the effort part of a strategy to combat customers’ treating stores as showrooms.

The company today raised its quarterly dividend 6.3 percent, to 17 cents a share. The higher amount begins with a dividend payable Oct. 2 to shareholders of record Sept. 11.

Best Buy lost sales to Inc. and Apple Inc., spurring then-CEO Brian Dunn to plan 50 closings of big-box stores this year and accelerate efforts to boost online sales and open stores selling mobile phones. Two weeks before announcing Dunn’s resignation in April, the company reported a $1.7 billion loss for the fiscal 2012 fourth quarter, which ended in March. Best Buy plans $800 million in cost cuts in the next three years.

Dunn’s Relationship

Some of the efforts outlined today by Mikan were initiated by Dunn before he resigned. He departed at the outset of a board investigation that found he had an inappropriate relationship with a 29-year-old female employee. The board is seeking Dunn’s successor.

Technology improvements will enable employees to download consumer reviews and other information about products to help shoppers, Stephen Gillett, president of Best Buy Digital and Global Business Services, told shareholders. The company has simplified price-matching and other policies to avoid confusion among employees and customers, according to Mike Vitelli, president of U.S. operations.

In March, Best Buy projected profit, excluding some items, of $3.50 to $3.80 a share in the current fiscal year. Analysts now are projecting $3.62, the average of 24 estimates compiled by Bloomberg.

Sales may range from $50 billion to $51 billion, the retailer said in March. Fiscal 2012 sales were $50.7 billion. The average of analyst estimates compiled by Bloomberg now is $49.8 billion for fiscal 2013.

Best Buy fell 4.1 percent to $19.48 at the close in New York. The shares have declined 17 percent this year.

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