Tablets up, games down in Best Buy Q2 results
Retailer forecasts stronger second half for games due to introduction of trade-ins
US retail giant Best Buy reported flat year-on-year revenues and falling profits in its fiscal second quarter report.
Revenues for the period ending August 27 were $11.35 billion, a 0.1 percent increase over $11.34 billion in the same period last year. Net profit was $177 million, down from $254 million last year.
The largest sales growth in the company's inventory was tablet computers, with iPad continuing to perform strongly. Sales of Android devices, however, exceeded the company's expectations.
"Going forward, we continue to be bullish on the growth of this new computing form factor and are encouraged by the new models in the pipeline over the next several months that will offer our customers even more choice, both online and in stores," said CEO Brian J. Dunn during an call with investors
However, sales gains were offset by decline in numerous areas, including gaming. Best Buy's executive vice president Michael A. Vitelli put the percentage loss in the "low to mid double-digits," attributing it to the period's weak release schedule.
"While there is a stream of new titles coming in the months ahead, it remains unclear where the customer will choose to spend," added Dunn.
"Regardless of the state of the industry, however, we are confident we have the people and promotions to continue growing share and making progress in this category.
Vitelli predicted that Best Buy's gaming business would improve considerably in the rest of the fiscal year due to its move into "trade-ins" against new releases.
"Pre-owned itself was relatively modest in the first half in the second quarter," he said. "What's happening now is we are beginning to do trade-ins. We're doing that successfully by having a really compelling offer on our price points of what we offer for trade-in, that we're starting to build that inventory that will allow us to have those sales in the second half."