Best Buy posts 52% profit increase for Q3

When it comes to the realm of consumer electronics, Best Buy is the reigning retail leader. Best Buy's market dominance was made even clearer with the company's fiscal 2008 Q3 earnings report.

Best Buy reported a 52% increase in its Q3 profits compared to the same period one year ago. In addition, overall quarterly revenue rose 17% from $8.5 billion USD to $9.9 billion USD thanks to 45 new store openings during the quarter. Revenue from Best Buy's online division helped the total with a 65% increase from fiscal 2007 Q3.

Not surprisingly, Best Buy attributed an extra week of after Thanksgiving revenue for its stellar third quarter performance.

Hot items for Best Buy during Q3 included consoles, flat-panel TVs, notebook computers and GPS units. When all was said and done, Best Buy's sales mix for the third quarter was 41%, 28%, 19%, 6% and 6% respectively for Consumer Electronics, Home Office, Entertainment Software, Appliances and Services.

"We are very encouraged by the strengthening we’re seeing in our customer relationships as well as our solid financial performance," said Brad Anderson, Best Buy's CEO and Vice Chairman. "The loyalty that our employees are building with customers will enable us to expand those relationships into new areas of growth in the future. Our employees should be proud of their performance in the quarter. It gives us momentum for the next leg of our growth journey. This is truly a very exciting time in our industry -- for our customers and for our company."

"We are pleased with the third quarter’s results and now forecast greater earnings growth for the year," said interim Chief Financial Officer and Senior Vice President of Finance Jim Muehlbauer. The ability of our employees to deliver exceptional operating results in a challenging macro environment reflects their focus on the customer and the relative strength of our categories in the current marketplace."

Best Buy's strong Q3 performance comes just weeks after CompUSA announced that it would close all of its stores during the opening months of 2008. CompUSA lost $45.7 million USD during Q3 2007 on revenues $424 million USD. CompUSA closed 126 stores earlier this year in order to trim dead weight, but that was not enough to stop the ship from sinking.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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