Best Buy reported record results for the quarter to August 31, though its earnings growth far from matched the tripling posted in the proceeding three months.
For its fiscal second quarter the giant home entertainment and appliance retailer had a net of $59 million, up 33.7% from the same period last year, while revenue, at $2.69 billion, rose 23.2%. For the half, earnings were up 77.6% to $106.3 million, and sales were up 23% to $5.07 billion. Same-store sales were up 11.1% for the quarter and 12.2% for the half.
"We are especially pleased to report a meaningful year-over-year increase in earnings as the current quarter included the expense of opening 19 new stores compared to none in last year's second quarter," said Dick Schulze, chairman of the 332-store chain. He indicated that store pre-opening expenses cut earnings for the quarter by about $8.6 million.
"Consumer confidence, coupled with a continued expansion of gross profit margins, led to our record financial performance," Schulze added. "Our seventh consecutive quarter of double-digit comparable-store sales increases was led by digital technology products."
Best Buy sales by product category for the quarter (in millions of dollars), with first-half results in parentheses, were: home office $967.7, up 23.2% ($1,827, up 23%); consumer electronics $698.9, up 23.2% ($1,319, up 23%); entertainment software $457, up 16.3% ($913.4, up 16.5%); appliances $295.7, up 23.2% ($507.4, up 23%); and other products $268.8, up 36.9% ($507.4, up 36.7%).
Schulze said the company's "grand openings in San Francisco and three small-market stores were extremely successful," and that the "expanded number of stores opened earlier in the year should contribute to improved earnings during the all-important holiday season."
Best Buy expects to open 23 stores in its fiscal third quarter, he said, including its first in San Diego; Jacksonville and Tallahassee, Fla.; Richmond and Norfolk, Va.; Rochester and Albany, N.Y.; and Providence, RI. In fiscal 2001 the chain expects to open about a dozen stores in the metro New York market.