Best Buy Reports Strong Third Quarter18 Dec, 2007 By: Chris Tribbey
Leading electronics retailer Best Buy had high-def TVs and GPS units to thank for a better-than-expected third quarter, company executives said Dec. 18. However, DVD sales were on the decline, with strong video game sales boosting the company's entertainment revenue.
“Consumer electronics appears to be once again the holiday gift of choice,” James L. Muehlbauer, SVP and interim CFO of the Minneapolis-based chain, said in a conference call with investors. Consumer electronics accounted for 41% of third-quarter revenue for the retailer. Entertainment software accounted for 19% of the company's third-quarter revenue.
The retailer reported net income of $228 million during the third quarter (ended Dec. 1), compared to net income of $150 million during the same period last year. For the nine months in the fiscal year, Best Buy's net earnings stand at $670 million, compared to $614 million during the same period last year.
“Black Friday sales were very encouraging,” said CEO Bradbury Anderson. “But the truth is that [holiday] shopping starts much before Black Friday.”
Best Buy reported record traffic in its stores on Black Friday, and executives said its advertisements for certain promotional bundles paid off. For example, Best Buy regulars snapped up a promotional offer that included HD DVDs.
“We learned that all bundles are not created equally,” said Shari Ballard, EVP of retail channel management for Best Buy. “One of those bundles included a laptop, noise canceling headphones and HD DVDs. In the past, we would have just looked at how many of those we sold. Now we have the capability to look at who actually bought them.”