Best Buy’s second-quarter entertainment sales drop 9%, forecast company-wide sales drop 11% for fiscal year – Reuters
August 30, 2022
On August 30, Best Buy reported a 9.2% decline in second quarter (ended July 30) entertainment sales of $478 million from $550 million a year earlier. The segment includes products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.
International entertainment sales fell 5.8% to $53.2 million from $58.6 million last year.
CEO Corie Barry said the drop in sales across all retail categories underscores the outsized results during the pandemic when consumers increased their purchases in part due to the post-pandemic rush and government stimulus checks .
“We are clearly operating in an uneven sales environment,” Barry said in a statement.
The executive said the retailer expected the consumer electronics industry to be weaker than last year after two years of strong growth driven by unusually strong demand for technology products and services and fueled in part by stimulus spending.
Barry said Best Buy will continue to “actively” evaluate other strategic actions to evolve its operating model, manage profitability and iterate on its growth initiatives.
“The macro environment has been more challenging due to several factors and this has put additional pressure on our industry,” she said.
From a merchandising perspective, Best Buy saw comparable sales declines in almost every category, with the main drivers being computers and home theater.
Domestic online revenue of $2.97 billion was down 14.7% from $3.48 billion, with e-commerce revenue accounting for 31% of revenue, down from 31.7% last year.
Chief Financial Officer Matt Bilunas said current-year planning calls for comparable sales to decline about 11% and operating profit to about 4%.
“We expect our [Q3] comparable sales will decline slightly more than the 12.1% decline we reported for the second quarter,” Bilunas said. He expects the year-over-year decline in the operating profit rate in the third quarter to be similar to that of the second quarter.
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