Electronics retailer Best Buy reported a 12.1% decrease in comparable sales during the inflation-afflicted fiscal second quarter of this year.
Its domestic gross profit rate was 22%, down from last year’s 23.7%, on account of “lower services margin rates, including pressure associated with the Best Buy Totaltech membership offering; lower product margin rates, including increased promotions; and higher supply chain costs,” according to the retailer.
“I am incredibly proud of our teams as they continue to rise to the challenges of the past few years and I remain impressed with their ability to lead through the rapidly shifting business environment,” Best Buy CEO Corie Barry said in a press release. “Our online sales penetration, at 31% of our total Domestic sales, is almost twice as high as pre-pandemic Q2 FY20 while our diluted EPS grew over 40% versus Q2 FY20.”
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“We are focused on balancing our near-term response to difficult conditions and managing well what is in our control, while also delivering on our strategic initiatives and what will be important for our long-term growth,” Barry said. “This includes actively assessing further actions to evolve our operating model, manage profitability and iterate on our growth initiatives.”
This comes after the company announced earlier this month that there would be further layoffs among its employees. Already, the company toted 100,000 employees in the United States and Canada, as of the end of January, compared with the nearly 125,000 employees in the same period in 2020. It spent $34 million of such restructuring costs in this second quarter, “primarily related to termination benefits,” according to its press release.
The company’s shares increased about 4% in early trading Tuesday, as television prices nationwide have fallen about 15%.
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Best Buy CFO Matt Bilunas anticipated a further decline in comparable sales, predicting to see “slightly more than the 12.1% decline.”
