The international rating agency Standard & Poor’s has placed the investment credit rating of the world’s largest electronics retailer Best Buy (NYSE:BBY) in observation status, which means that the Standard & Poor’s may cut the rating on Best Buy to “junk”. The drastic restructuring plan has heavily hit Best Buy.
Despite Best Buy delivered the better-than-expected fourth quarter core profit and maintained profit margin in the face of the fierce market competition environment, Best Buy booked a total of $2.6 billion of restructuring costs and other expenses in the fourth-quarter financial report.
Best Buy has said it will close 50 stores and open 100 small mobile shops last month in order to cut costs.
Standard & Poor’s still gives Best Buy a BBB-rating. Standard & Poor’s said it will determine whether to change the rating on Best Buy after discussions with the management of the latter over the company’s business strategies, the cost-cutting plans and growth initiative.
Best Buy stock price slipped 2.55 percent to $22.95 in the regular trading on Wednesday. The BBY stock price shed 0.48 percent in the after-hours trading. Since the beginning of this year, Best Buy stock price has aggregately dropped 19 percent.
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