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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.

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Best Buy
By rickon66 on 12/20/2007 2:37:26 PM , Rating: 5
Best Buy did this as it phased out mail in rebates. That should send a message to All retailers, both B&M and online that the road to sucess is not through rebates!




RE: Best Buy
By bighairycamel on 12/20/2007 2:46:17 PM , Rating: 2
Correct me if I'm wrong, but I thought they only phased out store MIRs, not manufacturer MIRs.


RE: Best Buy
By Brandon Hill (blog) on 12/20/2007 2:49:57 PM , Rating: 3
Browsing through their current circular, I don't see any rebates of any kind.


RE: Best Buy
By Samus on 12/21/2007 11:35:28 AM , Rating: 2
My shopping at Best Buy has increased exponentially after they phased out rebates a few years ago. Being able to walk in a B&M and pick up a hard drive or memory upgrade for a decent price and no rebates is very nice.

I commend OfficeMax for the same strategy...the Soyo 24" LCD being the most recent thing I purchased there, for $300, no rebate.


RE: Best Buy
By RjBass on 12/21/2007 3:36:19 PM , Rating: 3
My shopping at Best Buy has seriously gone down since only a few months ago when I went in to get a simple USB cable for a printer and they wanted $35 + tax for a 4ft cable.

I went over to Target across the street and picked up a 6ft USB cable for only $9.99.

It seems to me that the main reason why Best Buy is posting such enormous gains is because they are practically robbing their customers. They might as well put their greeters in ski mask and give them shotguns.


RE: Best Buy
By JonnyDough on 12/21/2007 5:42:16 PM , Rating: 1
I still find it hard to forgive Best Buy, considering all the money they made by ripping people off of rebates. Not to mention their profiling system that tells their salespeople to ignore certain customers over others.

I also don't like my purchases being tracked, my address and phone numbers being sold to third parties, and the list goes on. I love being "recommended" components for my computer that are not only way over-priced and old technology (such as video cards), but also sometimes not even compatible. Newsflash. If you don't know what you're talking about, don't try to sell me something. Thanks.

Regardless, I can find things cheaper online usually. With the cost of gas, the free shipping I get with NewEgg seems a good deal cheaper than driving 15 miles to the nearest Best Buy store anyway.


RE: Best Buy
By FITCamaro on 12/20/2007 2:50:22 PM , Rating: 2
I'm pretty sure this is correct. However its still big as their rebates on things like computers used to be in the $100-200 range.

As long as people don't send in rebates, manufacturers will continue to favor them because its great incentive for customers to buy their products and they don't always have to loose the money since the people don't send them in.


RE: Best Buy
By Oregonian2 on 12/20/2007 4:50:09 PM , Rating: 2
CompUSA was the ultimate in rebates!


RE: Best Buy
By rudy on 12/20/2007 5:32:03 PM , Rating: 2
Yes and before I heard they were going under I ended up with over 250$ in rebates which I will now not get, I signed up through comcast through them. Now i just plain lose it and am pretty angry about it. Going to return the modem soon.


RE: Best Buy
By Oroka on 12/20/2007 2:49:25 PM , Rating: 2
Rebates are fine, a bonus even, but dont advertise $19.99* when you have to pay $50 upfront. I have complained to several online computer retailers, and atleast 1 has started listing regular price first, then with rebate in red under it.

Rule of thumb is, listen to your customers and they will come back with thier friends. Ignore them and they leave in droves and bad mouth you every way they can (ie Radio Shack/The Source).


RE: Best Buy
By ebakke on 12/20/2007 2:59:38 PM , Rating: 3
God, I hate Radio Shack.


RE: Best Buy
By Brandon Hill (blog) on 12/20/2007 3:02:47 PM , Rating: 3
I love Radio Shack. I don't purchase major items from them, but when I need the odd audio cable, video connector or other random electronic parts (at a decent price), there's always one within about 5 minutes from anywhere in town.


RE: Best Buy
By ebakke on 12/20/2007 3:07:04 PM , Rating: 5
As soon as the internet provided the products that Radio Shack does, I stopped going there. Internet = lower prices, and better service (at least from the Radio Shack's I've been in). I can wait a few days for that odd cable.


RE: Best Buy
By onwisconsin on 12/20/2007 3:19:55 PM , Rating: 5
Homer: We'll search out every place a sick twisted solitary misfit might run to.
Lisa: I'll start with Radio Shack!


RE: Best Buy
By FITCamaro on 12/20/2007 3:24:07 PM , Rating: 2
Yeah but from what I've found is that while the cost might be lower, they get you in the shipping. A $5 cable thats $12 at Radio Shack will often have $5 in shipping charges. So is saving $2 worth waiting 3-4 days. Usually I'd just rather have it right away. Now if the difference with shipping is over $5 and I don't need it right away, then I'll buy it online.


RE: Best Buy
By BladeVenom on 12/20/2007 3:56:51 PM , Rating: 3
There's also wanting or needing it now. So until internet store can get it delivered faster than pizza, I will still occasionally use B&M stores.


RE: Best Buy
By bigboxes on 12/20/2007 6:43:41 PM , Rating: 2
Radio Shack is sooooo overpriced. When shopping online for anything I always factor in shipping. When shopping locally I factor in sales tax. In the end Radio Shack gouges you for that one cable. Thank God I live with in a stone's throw of Fry's.

And Best Buy can drop off the face of the Earth and I wouldn't lose any sleep. I don't care about rebates as long as the retailer is up front about it and not in the fine print. BB lost me due to corporate indifference. I had spent a lot of $$ there and they didn't care about my interests. Well, I just stopped shopping there and I tell everyone else how bad they are. There are too many other retailers out there. If they want me to remain loyal then they need to treat me with respect. The choice is mine. They don't choose to serve me. I choose (or not) to shop with them.


RE: Best Buy
By rebturtle on 12/20/2007 9:59:28 PM , Rating: 2
quote:
In the end Radio Shack gouges you for that one cable. Thank God I live with in a stone's throw of Fry's.


Funny, they are both owned by the Tandy corp. You've redirected your money into the same pockets. They simply serve different markets for many of the same things. Fry's competes with the larger B&M stores, and Radio Shack is for the convenience of everyone in every small town in America. You know, that $5 cable, or some bomb making parts....


RE: Best Buy
By bigboxes on 12/20/2007 10:38:15 PM , Rating: 2
Uh no. Fry's is not owned by Tandy. Recently Tandy renamed itself Radio Shack Corporation. Tandy did own Incredible Universe and when that venture went bust it did sell about 10 locations (including the store in Arlington that I mention) to Fry's. I also never said that I loved everything Fry's. It's a buyer beware world. If I don't need something immediately then I usually order online and show some patience. I had three boxes waiting for me when I got home. But, as I said previously, I need a cable Fry's doesn't gouge you.


RE: Best Buy
By rebturtle on 12/21/2007 8:08:19 PM , Rating: 2
quote:
Fry's is not owned by Tandy. Recently Tandy renamed itself Radio Shack Corporation. Tandy did own Incredible Universe and when that venture went bust it did sell about 10 locations (including the store in Arlington that I mention) to Fry's.


Oops, you got me on that one! I was running with (bad) information that someone else had given me without checking it out f