An unexpectedly strong fiscal fourth-quarter earnings performance helped Best Buy achieve record earnings for the year ended February 31.
For the quarter, net jumped 51% to $163.8 million from the year-earlier $108.8 million, to put fiscal-2000 earnings at $347.1 million, up 60% from the $216.3 million for fiscal 1999. As previously reported, Best Buy sales rose 25% to $4.32 billion for the quarter and were up 24% to $12.5 billion for the year. Same-store sales were up 11% for both periods.
Best Buy credited a higher-margin sales mix, along with the sales gain, for its increased profitability. It posted gross margins of 18.8% and 19.2% for the quarter and year, respectively, representing improvements of 1% and 1.2% from the same year-earlier periods.
For the year it also had a net increase of about $23 million, reflecting its lower debt level and the higher interest rates received on investments.
While home office products, including PCs, continued as the retailer's largest product sector, consumer electronics provided stronger growth, according to figures issued by the chain.
Those figures indicate CE sales rose 28.7% on the year to $3.5 billion and 33.8% in the quarter to $1.29 billion, while home office products had a below-average 20.7% increase for the year to $4.37 million and only a 17.5% rise for the quarter to $1.38 billion.
Software sales increased just 17.9% for the year to $2.37 billion and rose 19.4% to $949.2 million for the quarter. Appliance sales for those periods of $999.5 million and $258.9 million, were up 24.1% and 24.8%, respectively. Sales of other products climbed 37.9% to $1.25 billion for the year and 38.7% to $431.5 million for the quarter.
"Our performance in the fourth quarter exceeded our expectations and capped another breakaway year for Best Buy, solidifying our market leading position," said chairman Richard Schulze. "Our initiatives over the past few years have positioned us to embrace the new digital marketplace, while significantly enhancing core productivity of our assets, resulting in significant improvements in earnings.
"We expect that current initiatives, including our strategic alliances, our e-commerce business and increased store openings, will position us to create long-term shareholder value."
During the year Best Buy opened 47 new stores, closed one, and currently operates 357. It plans to open about 60 in fiscal 2001, including its first outlets in metro New York and Portland, Ore.