Best Buy Net Slips in Third Quarter
December 14, 2010,
MINNEAPOLIS--A drop in revenue and a slight increase in expenses pushed Best Buy's net income down 4.4 percent in its third quarter, to $217 million.
Revenue declined 1.1 percent to $11.9 billion in the quarter, which ended Nov. 27. This falloff included a 3.3 percent drop in same-store sales, including a decrease of five percent for the retailer's U.S. stores. Brian Dunn, Best Buy's chief executive officer, said third-quarter sales came in at less than expected.
Selling, general and administrative expenses rose 1.2 percent on a dollar basis and gained 50 basis points as a percentage of revenue, to 21.8 percent.
Gross margin did pick up 60 basis points in the quarter to 25.1 percent, which somewhat offset the revenue decrease and SG&A increase. Best Buy said the margin improvement was due largely to the continued growth of Best Buy Mobile, its mobile-phone shopping feature.
Jim Muehlbauer, executive vice president of finance and chief financial officer, said Best Buy expects "a significant amount of business" during the holiday selling season, but "we don't have complete visibility to how customers will behave over the next several weeks."