Best Buy Q4 Sales Up, Profit Down Slightly26 Mar, 2009 By: Erik Gruenwedel
Expecting the worst, Best Buy Co. March 26 reported fourth-quarter (ended Feb. 28) net income of $570 million, down 23% from income of $737 million during the previous year period.
Excluding pre-tax restructuring and impairment charges totaling $144 million, net income declined just 6% to $682 million. Included in the restructuring costs was $78 million for voluntary separation charges when 500 corporate employees opted for enhanced severance packages and left the company.
Same-store sales (open at least 12 months) in the United States fell 2.5%, compared to a 6.8% decline last year. The decline was driven by a reduction in customer traffic, partially offset by an increase in the average ticket.
Entertainment-software sales, which included DVD and Blu-ray Discs and music CDs, declined 11%, compared to a 1% increase last year. Low double-digit declines in DVDs and CDs drove this change. The category represented 21% of Best Buy revenue, compared to 23% last year.
Consumer electronics, which represented 40% of sales (down from 42%), reported 8.6% decline in comp sales, compared to a 5.6% decline last year.
Quarterly global sales increased 10% to $14.7 billion from $13.4 billion last year, driven by the inclusion of 213 new stores over the past 12 months in Europe. Currency fluctuations, however, contributed to a 4.9% decline in same-store sales. Without European impact, same-store sales declined just 2%.
“We prepared for reduced consumer spending and we were pleased when the quarter finished stronger than it began,” said Brad Anderson, CEO and vice chairman of Best Buy, in a statement.