Best Buy Slows Entertainment Sales Decline3 Mar, 2015 By: Erik Gruenwedel
Best Buy March 3 reported a 1.8% decline in same-store entertainment revenue in the fourth-quarter (ended Jan. 31), 2015. The consumer electronics retailer posted a 5.6% drop in same-store entertainment sales during the previous-year period
Minneapolis, Minn.-based Best Buy said the entertainment category, which includes packaged media, books, video games, consoles and CinemaNow, represented 11% of its $12.7 billion in domestic quarterly revenue. That percentage was unchanged from a year ago.
Indeed, entertainment generated a 0.4% sales increase compared with a 6.6% decline a year ago during the winter holiday period. Entertainment represented 12% of domestic holiday revenue, the same as a year ago.
While Best Buy didn’t disclose a reason for the “improved” entertainment results, Wedbush Securities senior analyst Michael Pachter speculates the chain had a healthy inventory of new-generation game consoles, which boosted sales.
“I presume they got better supply in the quarter,” Pachter said.
Meanwhile, ongoing material declines in the tablet category, a category with high online penetration by third-party competitors, contributed to a 2.1% drop in computing and mobile phones category. The unit saw a 2.9% increase in same-store sales last year.
“The tablet decline was substantial,” CFO Sharon McCollam said on the fiscal call.
Regardless, domestic operating income ballooned 90% to $749 million.