Best Buy reported fiscal first-quarter earnings almost exactly tripled those of the same year-earlier period on double-digit overall and same-store sales increases.
For the three months to May 29 the national chain posted a net of $47.3 million, up from the year-earlier $15.7 million. As previously reported, sales for the quarter were up 22.8% to $2.39 billion, and same-store sales increased by 13.3%.
"Our record financial performance for the quarter clearly reflects our industry-leading position, the improvements we’ve made in our operating model, and the health of our retail sector," said chairman Dick Schulze. "Our execution throughout all levels of the organization enabled us to capitalize on the strength of consumer spending, resulting in a 3% operating margin [against last year’s 1.4%] and the creation of improved shareholder value."
Schulze credited the earnings jump to a rise of 1.2 points in gross margin to 19.4% of sales, better inventory management, "continued improvement in retail execution," and a near half-point decline in overhead expenses to 16.4% of sales.
Figures released by Best Buy show consumer electronics as its biggest growth area during the quarter, with sales rising 27.5% to $644 million.
Sales of its largest sector, home office products, at $833 million, as well as those of appliances ($215 million) and those classified as other – including extended warranties ($215 million) – all had increases almost exactly matching the overall sales growth.
Sales of entertainment software increased 16.3% to $429 million.
During the quarter the 314-outlet chain opened stores in Ft. Worth, Texas, Reno, Nev., and Sacramento, Calif. In the current quarter it plans to open 20 stores, including its first in the Jacksonville and San Francisco areas.