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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AMC Theatres Ups Q2 Revenue, Narrows Loss

AMC Theatres, the world’s largest movie exhibitor, saw a string of box office hits revitalize the moviegoing business in the second quarter (ended June 30). The Leawood, Kan.-based company reported a quarterly loss of $121 million on revenue of $1.17 billion. That compared with a net loss of $343.6 million on revenue of $444.7 million in the previous-year period.

Through six months of the fiscal year, AMC, which operates more than 10,100 screens worldwide, has generated a net loss of $459 million on revenue of $1.95 billion. That compared with a net loss of $910.5 million on revenue of $593 million.

“We would like to extend a special thank you to Doctor Stephen Strange, Tom ‘Maverick’ Cruise, Elvis Presley, and all those hungry people-eating ‘Jurassic’ dinosaurs who graced our big screens in the quarter,” CEO Adam Aron said in a statement. “Our Q2 2022 results, in our minds, prove once again what we have long said, that as Hollywood releases movies with broad consumer appeal, people will flock to see them at movie theatres in huge and eye-popping numbers.”

Aron said AMC’s current internal forecast is that the 2023 domestic and international box office will be billions of dollars larger than that of 2022.

“We look forward to Q4 of 2022 and calendar year 2023 with glee,” he said.

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