Minneapolis - Best
Buy showed gains in third-quarter revenue and comp-store sales, but they came
at a cost.
Net earnings fell
29 percent to $154 million for the three months, ended Nov. 26, as the company
flexed its promotional muscles during Black November and took a $150 million
pretax restructuring charge to shut its 11 big-box U.K. stores and dispose of
certain "entertainment assets" in the U.S.
"We took actions
to provide value to customers and drive our business in this competitive
consumer environment," noted CEO Brian Dunn. The result, he said, was "positive
traffic, comparable store sales growth and continued progress on our key
strategic focus areas, highlighted by strong performance online."
Total revenue rose
1.7 percent to $12.1 billion during the quarter on essentially flat comp-sales
growth of 0.3 percent.
Within the U.S.,
net sales edged up 2 percent to $8.9 billion and comps increased 0.9 percent, reversing
five consecutive quarters of same-store sales declines.
In addition, an
expanded online assortment and more competitive pricing helped fuel a 20
percent increase in e-commerce sales.
On the product
front, mobile computing (including tablets), appliances, e-readers, mobile
phones and movies all posted the strongest comp store gains, which were
partially offset by comp declines in digital imaging, gaming and TV. TV sales
showed sequential improvement from prior quarters, the company said, resulting
in a low single-digit comp decline during the quarter.
Domestic gross profit declined 3 percent to $2.1 billion due
to steep promotions in key areas like mobile computing, TV and movies, which
were intended to drive traffic and sales, reclaim lost market share and reverse
a year-long string of quarterly comp declines.
As a result, gross profit was also impacted by a heavier mix
of sales in promotional items with lower margins, as well as by a higher
proportion of service attachments which include deferred revenue.
Minneapolis - Best Buy showed gains in third-quarter revenue and comp-store sales, but they came at a cost.