Best Buy misses Q3 expectations, phone and tablet sales still excellent

Best Buy misses Q3 expectations, phone and tablet sales still excellent
Best Buy reported that its income fell 29% in the third quarter as the company had to cut prices in some of the most popular product categories as tablets and smartphones to maintain traffic, especially during the busy Black Friday weekend.

The retailer missed analysts expectations and shares tumbled nearly 9% in pre-market trading.

Best Buy is facing increasing competition from online retailers and other discounters, but its own online store is also growing fast with revenue from online purchases up by 20%.

When it comes to products, the retailer again reported big gains in all mobile devices including tablets, cell phones and e-readers. The positive growth was offset by weaker TV and game sales.

"We took actions to provide value to customers and drive our business in this competitive consumer environment," said CEO Brian Dunn. As a result, the company could maintain positive traffic, comparable sales growth and progress in key areas. 

Best Buy’s Q3 ended on November 26th. The retailer registered net income of $154 million, down from $217 million in the same period last year.

source: WSJ

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10 Comments

1. Kmack

Posts: 26; Member since: Nov 15, 2011

damn, you cheated with nexus sales and still couldn't pull it off! :P

2. HTCiscool

Posts: 449; Member since: Jul 16, 2011

Well Best Buy is the exclusive retailer of many high-end Tablets in the country, its pretty much the Tablet shop, and it also has great prices, so yeah, most Android Tablet users got their tablets from BB. But falling 29% in one quarter is pretty drastic

3. Tux4g63

Posts: 121; Member since: Oct 21, 2011

And once again, Best Buy Mobile drives the business... Please keep in mind folks, the facts they released do not point to profit, operating costs, or margins, etc... All it says is that sales fell from last year, and the company missed its goal. If you look at the year end sheets, Best Buy still made money hand over fist.

4. ardent1

Posts: 2000; Member since: Apr 16, 2011

It's not just profits, it's ROIC. The sad fact is we no longer need a Best Buys. It may shrink or go the way of Circuit City. Here are the facts, anyone can buy TVs from Walmart rather than BB. As for cell phones, you have Radio Shack / Target, the Costco's of the world, mall kiosks, online stores, captive stores, etc. As for computers and laptops, the selections are shrinking. People aren't buying digital cameras or camcorders due to smartphones like the iPhone. MP3 players aren't selling, and I sell the Samsung Galaxy player with a sizeable discount. The new, new thing is tablets and ereaders but both BN & Amazon sells those as well as Walmart, etc. The last few times I was in Best Buys, there were more employees than customers. One last thing tux4g63, it's known as segment analysis per US GAAP aka FASB 131.

6. Tux4g63

Posts: 121; Member since: Oct 21, 2011

Thanks for the clarification. I was just trying to point out how the article might have been slightly confusing to the casual reader. The data that was published is statistical and purely for the business to monitor itself and for shareholders to gauge how and where the company is at. The only thing I was trying to point out was how the company can miss projected sales/earnings but still make a profit, which at the end of the day...is still a profit.

5. LewsTherin006

Posts: 140; Member since: Nov 18, 2011

People are starting to see that $100 HDMI cables arent worth it. I used to work at BBY and its no surprise their profit was down. People are starting to wake up to their BS.

7. c.hack

Posts: 614; Member since: Dec 09, 2009

Big surprise. high prices + poor service = losing customers

8. cthunder

Posts: 126; Member since: Nov 02, 2010

Both you and Ardent1, said it best. I used to goto (sucker!) Best Buy for everything. But 2 years ago was the last straw. They were always priced hirer than other sellers and the customer service just kept getting worse.

9. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

I was just in a Best Buy over the past weekend... maybe it had to do with holiday sales taxing their inventory, but I thought their whole section of phones, tablets, laptops, and computers was just pitiful as far as selection goes. I was wondering if maybe it was just me being picky until my girlfriend, who's not quite as much of a tech enthusiast as myself, leaned in and said she wasn't impressed with anything she was seeing there and we may as well check online like newegg or tiger direct. I was pretty proud of her in that moment.

10. Tux4g63

Posts: 121; Member since: Oct 21, 2011

For your girlfriend to just mention those two sites is already pretty impressive. She gets brownie points. A nice big stack might I add.

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