March 1, 2018
It’s not all gloom and doom at Best Buy.
The nation’s largest consumer electronics retailer March 1 reported a 16.8% increase in fourth-quarter (ended Feb. 3) same-store entertainment revenue, compared to a 18.6% decline in the previous-year period.
The entertainment segment, which includes myriad products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, generated 10%, or $1.39 billion, of domestic revenue. The segment generated 9% ($1.1 billion) in the previous-year period.
From a merchandising perspective, Best Buy generated comparable sales growth across most of its categories, with the largest drivers being mobile phones, gaming, appliances, smart home, wearables and home theater.
“We are especially proud of our 9% comparable sales growth in the quarter, which brings our annual comparable sales growth to 5.6% for the year,” CEO Hubert Joly said in a statement.
International entertainment segment comp sales increased 11% from a 23.8% decline in 2017, generating 9%, or $123.8 million, in revenue. The segment generated $102.9 million in revenue last year.
While it was reported that Best Buy will be shuttering all domestic branded mobile stores later this year, overall domestic revenue in the quarter was negatively impacted by the closure of 18 big box stores.
Meanwhile, from a profitability standpoint, Best Buy operating income in the domestic segment declined, which CFO Corie Barry attributed to higher employee compensation and SG&E expenses.
“This is due to the increase in the incentive compensation expense for more than 85,000 store and corporate employees as a result of the very strong performance throughout the year, and to the investments we’ve made in the business,” Barry said. “These expenses were partially offset by efficiencies and cost savings.”