Aggressive growth plans, sales of higher-margin goods and an increase in average sales prices all helped to boost Best Buy’s latest financial results.
The retailer reported net earnings of $228 million for its fiscal third quarter ended on Dec. 1, 2007. This compares with $150 million for the prior-year third quarter. Total quarterly revenue increased 17 percent to $9.9 billion.
“We are very encouraged by the strengthening we’re seeing in our customer relationships as well as our solid financial performance,” said Brad Anderson, vice chairman and CEO of Best Buy, in a statement. “The loyalty that our employees are building with customers will enable us to expand those relationships into new areas of growth in the future.”
Best Buy appears not to be suffering turbulent times in the retail sector; only days ago, rival CompUSA announced it will close all its stores by the beginning of 2008.
Best buy announced that it added 127 new stores in 2007, and it intends to continue with this growth strategy, opening 150 stores internationally next year, up from a previous number of 135 stores.
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International revenue grew 32 percent, compared with just 15 percent domestically. Best Buy currently has a presence in China and Canada, although the company said it intends to open stores in Turkey and Mexico in 2008. Best Buy has also been linked with a possible buyout of U.K. retail giant DSGi, although nothing has ever been admitted by either firm.
The retailer also said that it achieved higher revenue from video gaming, flat-panel TVs, notebook computers and GPS products, although this was offset by a decline in sales of tube TVs, DVDs and CDs. In addition, Best Buy reported a low double-digit gain in computer and home theater services.
The retailer is also hoping to boost future growth by revamping all of its U.S. stores over the next two years and installing its Best Buy Mobile experience—a shop within the shop specializing in mobile phone technology and sales.