Best Buy Fourth Quarter Profits Rise, Game Sales Decline

Electronics chain and major U.S. game hardware/software retailer Best Buy announced increased profit for the financial quarter ending February 25th. The company's increased revenue was fueled by new store openings and higher sales over the same period of time in 2005. Revenue for the quarter increased 15 percent to $10.7 billion, and reflected the net addition of 103 new stores in the past 12 months, and a comparable store sales gain of 7.3 percent driven partially by strong sales of both the Xbox 360 and PSP hardware. However, the company reported that despite the higher hardware sales overall, this gain was offset by a general sales decline across both software and accessories, which were down 4.5 percent versus the same period last year, and reflected industrywide transition issues for the 2005 holiday season. Darren Jackson, executive vice president of finance and CFO, said, “We're in the midst of a strong product cycle. Sales of flat-panel televisions and the excitement around the high-definition experience are accelerating. Gaming is being re-energized through the launch of new systems with expanded capabilities.” Jackson added that growth was expected to continue, stating that the company anticipates opening nearly 90 new stores and a comparable store sales gain of 3 percent to 5 percent through 2007. He commented: “With clear growth priorities, a single operating model, expanded service capabilities and our focus on customers, we plan to maximize the strong product cycle and deliver a differentiated experience for consumers,” he commented. “We believe this combination will drive our results and growth in fiscal 2007 and beyond.”