Record sales and earnings for the fiscal fourth quarter and year to February 28 were turned in by Best Buy, which passed a milestone as its annual sales topped the $10 billion level.
The retail chain's net for the quarter rose 72.1% to $110.2 million, to put earnings for the year at $224.4 million, up a steep 137.6%. Sales were up 21.3% to $3.46 billion for the quarter and 20.6% to just under $10.1 billion on the year, with comparable stores showing increases of 10.8% and 13.5% for those periods.
Best Buy's gross margins were 17.9% and 18.1% of sales for the quarter and year, each up about two percentage points from those of the same fiscal-1998 periods. Best Buy said the improvement reflected a better sales mix and improved inventory turnover, which "resulted in fewer markdowns."
"Robust consumer spending, market share gains and the ability to execute our improved operating strategies" keyed the earnings improvement, said chairman Richard Schulze. He noted that during the year the company reduced debt by more than $380 million, and so slashed interest expense.
Also, said Schulze, the new Concept 4 store format "is uniquely designed to meet the needs of our customers as we enter the most significant technological revolution in more than a decade."
Best Buy, which currently has 311 stores, plans to open about 45 new sites in fiscal 2000, including four prototypes of small-market format stores, and convert 20 of its superstores to the larger Concept 4 format. The store additions and "our e-commerce strategy and the digital product revolution create significant growth potential for Best Buy," Schulze said.