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Best Buy Says Q2 Entertainment Sales Drop 9%, Forecasts Company-Wide 11% Sales Decline for Fiscal Year

Best Buy Aug. 30 reported a 9.2% drop in second-quarter (ended July 30) entertainment sales of $478 million, compared with $550 million in the previous-year period. 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 a year ago.

CEO Corie Barry said the sales declines across all retail categories underscore the outsized results during the pandemic when consumers upped their purchases in part due to the post-pandemic rush and government stimulus checks.

CEO Corie Barry

“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 softer than last year following two years of elevated growth driven by unusually strong demand for technology products and services and fueled partly by the stimulus spending.

Barry said Best Buy would continue to “actively” assess further strategic actions to evolve its operating model, manage profitability and iterate on its growth initiatives.

“The macro environment has been more challenged due to several factors and that has put additional pressure on our industry,” she said.

From a merchandising perspective, Best Buy had comparable sales declines across almost all categories, with the largest drivers being computing and home theater.

Domestic online revenue of $2.97 billion decreased 14.7%, from $3.48 billion, with e-commerce revenue representing 31% of revenue compared with 31.7% a year ago.

CFO Matt Bilunas said current fiscal-year planning calls for a comparable sales decline around 11% and operating income of approximately 4%.

“We anticipate that our [Q3] comparable sales will decline slightly more than the 12.1% decline we reported for the second quarter,” Bilunas said. He anticipates the year-over-year decline in the operating income rate in Q3 will be similar to the second quarter.

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