MINNEAPOLIS-Best Buy’s fiscal year ended on a distinctly sour note, with net losses of $1.7 billion for the quarter and $1.2 billion for the fiscal year, which ended on March 3.
The company’s net sales rose 3.4 percent in the quarter to $16.6 billion, but included a 2.4 percent drop in same-store sales. For the fiscal year, net sales rose 1.9 percent to $50.7 billion, including a 1.7 percent decline in same-store sales.
Brian Dunn, Best Buy’s CEO, said the retailer would take “major actions” to improve its operating performance. Among these changes are closing of 50 big-box stores, changing others to its Connected Store format and adding Best Buy Mobile stand-alone locations. The company will also look to lower costs in its corporate and support structure through the elimination of about 400 positions and information-technology services savings.
With these and other initiatives, Best Buy is targeting savings of $250 million for fiscal year 2013 and $800 million by fiscal year 2015, the company said.
Along with enhancing Best Buy’s multichannel strategy, “these changes will also help lower our overall cost structure,” Dunn said. “We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices, which will help drive revenue. And, over time, we expect some of the savings to fall to the bottom line.
For the quarter, gross margin was flat at 24.4 percent. Selling, general and administrative expenses rose 4.2 percent in dollars and 10 basis points as a percentage of sales to 16.6 percent.