MINNEAPOLIS-Declining sales and margins sent Best Buy’s net income on a steep slide of 90.6 percent in the second quarter to $12 million.
Net sales in the quarter, which ended on Aug. 4, dropped 3 percent to $10.5 billion, with a same-store sales decrease of 3.2 percent. Gross margin fell 110 basis points to 24.3 percent, with much of the impact coming from increased promotional activity in computers along with a less favorable product mix in televisions.
Selling, general and administrative expenses declined 2.5 percent in dollars but edged up 10 basis points as a percentage of sales, to 23.1 percent. In its statement on the second-quarter results, Best Buy said it has been reducing costs through changes in its corporate and field operating models, and through store closures. In the quarter, Best Buy slimmed its big-box-store square footage by 4 percent year over year.
Yesterday, Best Buy announced the appointment of Hubert Joly as its president and CEO. The company characterized Joly as an expert in turnaround and growth across the media, technology and service sectors.