Best Buy’s summer so far was better than expected, but its profit was dinged partly because of costs from a restructuring the retailer started in the second quarter.
The Richfield-based electronics retailer recorded $114 million in charges from the restructuring, including termination costs. It did not say how many employees were laid off.
“The restructuring initiative is intended to redirect resources for better alignment with changing customer behaviors and the company’s strategy,“ the company said in a news release.
The release of the Nintendo Switch and other wins during May, June and July helped Best Buy record $9.4 billion in sales, a 1.6% increase compared to the second quarter last year.
“After a long run of poor numbers, Best Buy finally has something to celebrate with a 1.6% rise in overall revenue. It also posted the strongest positive comparable sales growth — also of 1.6% — in three years,“ said Neil Saunders, managing director of GlobalData. ”However, given that the levels of growth remain low, it would probably be wise to keep the champagne on ice and celebrate with prosecco or cava instead.”
Profits were down 36% to $186 million, or 87 cents a share.
“This better-than-expected sales growth was driven by a mix of new technology innovation, our relentless focus on a seamless omni-channel customer experience and our strong vendor partnerships,” said CEO Corie Barry in the news release. “Our sales growth momentum has continued into August driven by strong customer response to our back-to-school sales events.”
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