|
Best Buy Co., Inc. reported net earnings of U.S $138 million, or $0.28 per diluted share, for its fiscal third quarter ended on Nov. 26, 2005. Net earnings increased 11 percent from $125 million, or $0.25 per diluted share, for the fiscal third quarter of the prior year, assuming Best Buy expensed stock-based compensation last year, as it does in the current fiscal year.
Total revenue increased 10 percent to $7.3 billion, driven by new store openings and a comparable store sales gain of 3.3 percent. Gross profit dollars increased 16 percent to $1.8 billion, fueled by revenue growth and a 120-basis-point improvement in the gross profit rate. The improvement included a 30-basis-point benefit (or $0.04 per diluted share) related to the initial recognition of gift card breakage (gift cards sold but not expected to be redeemed). The gift card breakage was recognized in revenue.
Earnings per diluted share grew 12 percent to $0.28, compared with $0.25 in the prior year's third quarter, adjusted for stock-based compensation expense. The company repurchased $172 million of common stock during the quarter.
Fiscal-year-to-date purchases totaled nearly $434 million. Best Buy opened or converted 154 segmented stores; the company now operates a total of 284 segmented stores in the U.S.
Revenue from the international segment grew 19 percent, fueled by the opening of 16 new stores in Canada. "We entered this quarter with very ambitious plans for organic growth and transformation activities," said Brad Anderson, vice chairman and CEO of Best Buy. "We invested aggressively in a portfolio of initiatives. Specifically, we converted a record number of segmented stores, launched Best Buy Canada into Quebec and expanded our services business. Clearly, we over invested in certain transformation activities. We are evaluating our spending to increase the yield and will edit activities that aren't delivering results."
U.S. Best Buy stores reported third-quarter revenue of $6.4 billion, an increase of 9 percent, supported by the opening of new stores and a comparable store sales gain of 3.7 percent. An increase in the average transaction size was driven by a continued shift to higher-ticket items, including flat-panel TVs, appliances and notebook computers.
Said Brian Dunn, president of retail for North America, said, "Our retail team continued to deepen the relationships with customers. They delivered a rewarding store experience that differentiates us from the competition. In particular, we were encouraged by the enthusiastic customer response to the Magnolia Home Theater store-within-a-store experience, which takes advantage of the rapid growth in flat-panel televisions through a broader, high-end assortment."
Back
to Daily News
|
