MINNEAPOLIS–A laggard sales performance and rising costs combined to reduce the second-quarter bottom line for Best Buy by 30 percent, to $177 million.
Net sales for the quarter, which ended on Aug. 27, finished essentially flat at $11.3 billion, which included a decline of 2.8 percent in same-store sales. Brian Dunn, Best Buy’s CEO, said the quarter’s sales reflected caution exercised by consumers, leading to reduced sales in consumer electronics. Sales at Best Buy’s U.S. stores in appliances and online sales rose by double digits, on the other hand.
But increases in cost of goods sold and selling, general and administrative expenses hurt the bottom line. Gross margin fell 40 basis points to 25.3 percent. SG&A increased 3 percent in dollars and picked up 70 basis points as a percentage of sales, to 22.8 percent.
Best Buy said it now expects revenue for the fiscal year as a whole to total between $51 billion and $52.5 billion, from 1 to 4 percent higher than in the last fiscal year. Same-store sales are projected to be from flat to a 3 percent decrease.