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.