Although Best Buy reported profits of $155 million, its recent quarterly results were lower than expected. The chain was hit by rising costs as it expands and was hurt by ongoing weak consumer demand in TVs and other products, it said.
Best Buy chief exec Brian Dunn said, “Consumer spending has been episodic and (it) appears that our customers are operating on cues from the broader environment,” Dunn said on a call with analysts, reported Reuters.
Best Buy’s net profit of $155 million for its fiscal first quarter, was up slightly from $153 million, a year earlier. The chain posted a low-single digit decline in comparable-store sales in TVs during the first quarter as well as weak sales its video gaming, music and movie categories. Net revenue rose about 7 percent to $10.79 billion, but analysts had expected a net revenue of $10.93 billion. Sales at stores at least 14 months old rose 2.8 percent.
Selling, general and administrative expenses rose to 23 percent of revenue, up from 21.9 percent a year ago. Best Buy said the increase was due to opening new stores, the need for higher investments to boost sales and foreign currency fluctuations.
Separately, Best Buy announced today a trade-in program that launches in late summer. People can bring their used games to Best Buy for a store gift card. The program is in addition to an existing Best Buy online, mail-in trade in program for video games.
Source: Reuters
Best Buy Misses on Q1 Results
