Best Buy Gets Early Christmas Present20 Nov, 2014 By: Erik Gruenwedel
Domestic same-store sales increased 3.2%, underscoring CE retailer’s ability to compete against online behemoth Amazon
Best Buy Co. Nov. 20 reported third-quarter (ended Nov. 1) net income of $107 million, up 98% on income of $54 million during the previous-year period. Revenue was flat at $9.3 billion.
In the United States, Best Buy nearly doubled operating income to $204 million on revenue of $7.9 billion — up about 1.2% from sales of $7.8 billion a year ago. Same-store sales spiked 3.2% compared with 1.8% a year ago.
Notably, domestic entertainment sales, which include movies, TV shows, music and video games, increased 1% to 7% of total revenue. All other product categories, including consumer electronics, computing and mobile phones, and appliances, remained flat. Services revenue, which includes product service contracts, extended warranties and The Geek Squad, among others, dropped 1%.
More importantly, the Minneapolis, Minn.-based CE retailer saw online sales jump 22% to $601 million, due in part to increased availability of product shipped directly from local stores, increased online users and marketing.
Best Buy now ships online orders from more than 1,400 stores, compared with 400 stores during the previous-year period.
In the fiscal call, CEO Hubert Joly said Best Buy would approach the upcoming winter holidays with a goal of offering more items priced below $100, which would include home entertainment.
Internationally, Best Buy reported an operating loss of $14 million, which was an improvement over the $20 million operating loss in the previous-year period. Sales declined almost 9% to $1.38 billion due to unfavorable exchange rates and slower sales in China.