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Best Buy 4Q profit dips, but results top expectations

March 27, 2009|Associated Press

CHICAGO — Consumers snapped up surprising numbers of flat-screen televisions, laptops, digital cameras and cellphones during Best Buy Co.'s latest quarter, helping boost revenue 10%, the company reported Thursday.

Sales in the fiscal fourth quarter that ended Feb. 28 were strongest in February, and the world's largest consumer electronics retailer said same-store sales might have been even better if a plan to scale back inventory hadn't left some stores short of items that shoppers were seeking.

"We were surprised with demand," said Chief Operating Officer Brian Dunn, who is set to become chief executive this summer. "We know we left some sales on the table in January and February."

Despite the revenue growth, the world's largest consumer electronics chain said its profit sank 23%, mostly because of one-time charges.

Executives promised to take advantage of the liquidation of their closest competitor to attract customers who used to shop at the now-defunct Circuit City Stores Inc. "We believe this environment presents a tremendous amount of opportunity, and we intend to take full advantage of those opportunities," Dunn said.

Richfield, Minn.-based Best Buy spent the quarter wading through a series of internal and industry changes, offering buyouts to corporate staff members before laying off workers at its headquarters. And it announced Dunn's appointment.

Profit fell to $570 million, or $1.35 a share, as restructuring charges dragged down results. That compares with $737 million, or $1.71, a year earlier

Excluding those one-time charges, which amounted to 26 cents a share, Best Buy earned $682 million, or $1.61 a share -- well ahead of forecasts. Revenue grew 10% to $14.72 billion.

The retailer also gave a better-than-expected outlook for the full year but cautioned that the recession and consumers' unwillingness to shell out for some big-ticket items made forecasting difficult.

Best Buy shares climbed $4.21, or 12.6%, to $37.67.

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