MINNEAPOLIS -- Net earnings at Best Buy during the second fiscal quarter were one for the record book. The chain reported a 32 percent increase to a record $76.7 million, up from $58.1 million reported in the same period last year.
Best Buy revenues for the second quarter ended Aug. 26 climbed 18 percent to $3.2 billion, compared to $2.7 billion in the same three months in 1999. Comp-store sales were up 5.1 percent for the quarter, on top of the 11.1 percent reported last year.
"We are pleased to report record profits for the quarter, while supporting our increased retail store expansion and the successful launch of our enhanced BestBuy.com clicks and mortar model," said chairman/CEO Dick Schulze. "Despite an environment of moderate comparable-store sales growth, our financial performance continues to improve, fueled by a doubling of digital product sales."
Best Buy said the gross profit margin in the second quarter improved 80 basis points to 20.5 percent of sales, up from 19.7 percent in the year-ago period. Sales of more fully featured products in the CE category, including digital products, accessories and services, led to this improvement.
SG&A expenses represented 16.8 percent of sales, compared to 16.4 percent in the same quarter last year. The 40-basis-point increase principally reflects the costs associated with more than 60 new store openings planned for the current year, including preparation for the grand opening of the New York tri-state area later this month and expansion of BestBuy.com.
For the six months, Best Buy reported net earnings of $148.9 million, a 42 percent hike over the $104.9 million recorded in the first six months of the past fiscal year.
Sales for the six months were $6.1 billion, up 21 percent from the $5 billion recorded in the year-ago period. Comp-store sales for the six months increased 7.2 percent over the same period a year ago.
In the second quarter, Best Buy opened 12 new stores, including the first four locations in the New York tri-state area. About 45 new stores are scheduled to open during the second half of the fiscal year, including 10 more in the New York tri-state region.