Best Buy will not hunker down says CEO Brad Anderson
Best Buy’s third-quarter financial results were better than expected.
The Minneapolis consumer electronics retailer announced today an increase of 14 percent in sales – at $11.5 billion – and 1.7 percentage points of its U.S. market share, compared to the previous year’s period.
Overall profits were slightly down at $163 million compared to $228 million for the same period last year. And in these economic times, flat or slightly down is the new up!
Many media outlets “mistakenly” reported a steep fall in the retailer’s profits, having blindly taken the announced $58 million figure that actually included a non-operating impairment charge of $111 million, related to a significant and sustained decline in the market price of the company’s nearly 3 percent stake in The Carphone Warehouse Group.
Last May, Best Buy bought half of the U.K. retailer’s distribution business for $2.1 billion which also included a 3% stake in Carphone.
The good news: increase sales and gross margins
The company says that while store traffic was down, people were buying bigger ticket items like home theaters, notebook computers, Blu-ray video players, flat screen TVs and mobile phones; fueling higher gross profit.
Gross margins rose to 24.9 percent from 23.5 percent despite strong sales of notebook computers, which carry a lower gross profit margin.
In the U.S., Best Buy is comprised also of Best Buy Mobile, Geek Squad, Magnolia Audio Video, Napster, Pacific Sales and Speakeasy operations.
