UPDATE 4-Best Buy vows to change tack; mum on CEO search
* Q1 EPS 72 cents vs Street view 59 cents, ex-items
* Same-store sales off 5.3 pct in quarter vs view off 2.7 pct
* Interim CEO to detail turnaround plan later in summer
* No word on permanent replacement for CEO
* Shares up 1.5 percent
By Dhanya Skariachan
NEW YORK, May 22 (Reuters) - Best Buy Co Inc's interim chief executive said on Tuesday the world's largest consumer electronics chain needed to "change substantially" to fend off online and discount rivals, but offered little in the way of details.
Interim CEO Mike Mikan's comments came just weeks after Brian Dunn abruptly resigned from the top job during a probe that eventually found he had an improper relationship with a female employee, leaving the company without a permanent CEO as it starts planning for the all-important holiday season.
"We do not have all the answers today," Mikan said on a conference call after the retailer reported yet another quarter of same-store sales declines.
Mikan promised to take bold steps and said he will shed more light on the turnaround plan later this summer.
Best Buy did not give an update on the CEO search process. It only announced on Monday the hiring of headhunter Spencer Stuart to conduct the search, almost six weeks after Dunn left the post.
"The keys to this investment story remains whom will lead this chain in the future and what will be the plan to right the ship," Credit Suisse analyst Gary Balter said, echoing the view shared by many on Wall Street.
While Mikan is a candidate for the post, industry watchers have said the retailer will likely have to pick an outsider as CEO for the first time in its 46-year history to regain Wall Street's confidence.
At least two brokerages have downgraded the stock this month, citing lack of leadership.
BB&T Capital Markets analyst Anthony Chukumba, who recently downgraded the chain to "hold" from "buy," worried that even if Best Buy named a CEO soon, the person may not have enough time to prepare the retailer for the holiday season.
Analysts have also raised concerns about Best Buy's inability to compete effectively in a marketplace where customers often go into its stores to test pricey electronics, then search for better prices and buy the items online via desktop or using smartphones and other mobile devices.
Same-store sales, or sales at stores opened at least 14 months, fell 5.3 percent in the first quarter ended May 5. Analysts, on average, expected a 2.7 percent decline, according to Thomson Reuters data.
The chain has reported declines in same-store sales in seven of the last eight quarters.
Still, a lower tax rate and an extra week compared to a year earlier helped the retailer beat Wall Street profit estimates for the first quarter.
"The reality is that nothing has changed yet," JPMorgan analyst Christopher Horvers said. "Sales are still challenged, as are margins."
NOT NEARLY ENOUGH
Earlier this year, Best Buy laid out a plan to close 50 large U.S. stores and lay off another 400 employees to cut costs. But analysts have argued the steps are not nearly enough to fix its problems.
"Turnaround is not closing 50 stores," Wedbush analyst Michael Pachter said, adding the company needed to shut at least half of its stores and focus on smaller stores and higher-margin products.
The company's problems have been exacerbated by the recent departures of its chief marketing officer and the finance chiefs of both domestic and international businesses, as well as of the CEO.
Founder Richard Schulze was also forced out as chairman after the probe into Dunn found that Schulze did not tell board members or company officials about the allegations.
SALES HELPED BY EXTRA WEEK
Net earnings fell to $161 million, or 47 cents a share, from $255 million, or 64 cents a share, a year earlier. Excluding items, it earned 72 cents a share, beating the average estimate of 59 cents.
Sales rose 2.1 percent to $11.61 billion, topping the average estimate of $11.52 billion, but the results were boosted by an extra week in the quarter versus the prior year.
"But for the extra week, this would have been a terrible result," Pachter said.
Results were also helped by a lower tax rate and strength in its U.S. online segment.
The company maintained its fiscal 2013 outlook, seeing earnings of $3.50 to $3.80 a share, excluding restructuring costs.
Best Buy shares rose 1.5 percent to $18.45 after touching a low of $17.94 on Tuesday.
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