Best Buy Q1 Entertainment Sales Increase 11%25 May, 2017 By: Erik Gruenwedel
Best Buy May 25 said first-quarter (ended April 29) entertainment revenue increased 11.3%, compared with an 11.6% decline in the previous-year period. Entertainment represented 7% ($554 million) of domestic revenue, compared with 6% ($470 million) a year ago.
The entertainment category includes Blu-ray Disc and DVD movies, TV shows, music CDs, books, video games, hardware and technology toys.
Television sales related to the shift of the Super Bowl into the quarter positively impacted the domestic segment by less than 1%.
“Contributing to these better-than-expected results was the strong performance in our online channel, which grew 24% in the quarter,” CEO Hubert Joly said in a statement.
Domestic online revenue topped $832 million, representing 10.6% of total sales compared to 8.5% ($665 million) a year ago.
Separately, former CEO Brad Anderson blasted a House GOP proposed “border adjustment tax” (BAT), which seeks to impose an added tax on imported goods. Exported good are exempted from the tax, while imported good sold domestically are subject to the tax. The reported 20% tax is intended to equalize money flows across borders and dis-incentivize companies from offshoring profits.
Critics, including Anderson, contend the tax will make products such as consumer electronics manufactured abroad (i.e. China, Mexico, etc.) more expensive and cause inflation.
‘The BAT is a new tax on everyday items purchased by hardworking consumers, which would lead to significant price increases on essential products and job losses for the retail industry, an industry that is responsible for 42 million jobs in the U.S.,” Anderson wrote in a May 22 blog statement.
He said the proposal “moves the country in the wrong direction” by abandoning “real tax reform” aimed at lowering rates and eliminating loopholes, and instead introduces new loopholes for foreign sellers.
“[It] picks winners and losers among various industries. The BAT is an untested policy proposal with risks that far outweigh any theoretical benefits,” Anderson wrote.
Despite pushback from lawmakers (including Republicans) and the Trump Administration, House GOP leaders say the BAT could raise more than $1 trillion to help offset Trump-proposed individual and corporate tax cuts.