Minneapolis - Restructuring charges for 41 previously announced store closures dragged down Best Buy's fiscal first-quarter net earnings 26 percent to $158 million.

Excluding the $127 million in one-time charges, profits fell 4.7 percent to $246 million for the three months, ended May 5.

Total revenue rose 2 percent to $11.6 billion while comp-store sales fell 5.3 percent for the three-month period. U.S. revenue increased 5.1 percent to $8.8 billion and domestic comp-store sales declined 3.7 percent.

"Best Buy is in a turnaround, and the strategic priorities we laid out at the beginning of the year are just the first phase of the changes to come," interim CEO Mike Mikan said in a statement. "We know we have to better adapt to the new realities of the marketplace, and we are creating a long-term plan designed to make Best Buy more relevant with customers and position the company for sustained, profitable returns in the years ahead."

Tablets, mobile phones, e-readers and appliances buoyed U.S. comps during the quarter, but the gains were more than offset by comp declines in notebooks, gaming, digital imaging and TV.

Specifically, mobile phone comps grew 13 percent, subscriptions and service revenue both increased 11 percent, and U.S. online sales grew 20 percent year over year.

Gross profit dollars increased 4 percent, but included a rate decline of 30 basis points due to lower computer repair revenue and the continuing shift from one-time transactions to ongoing Tech Support memberships, the company said.

During the quarter the company shut 41 of the previously announced 50 U.S. big-box stores marked for closure this year, leaving the chain with 42.4 million square feet of big-box retail space, down from 42.5 million last year, and revenue of $854 per square foot, unchanged from 2011.
Release Date: 
2012-05-22 12:50:52
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Abstract Web: 
Minneapolis - Restructuring charges for 41 previously announced store closures dragged down Best Buy's fiscal first-quarter net earnings 26 percent to $158 million.
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