MINNEAPOLIS-As it continues to progress in its Renew Blue program, Best Buy reported that its third-quarter bottom line turned from red to black, posting net income of $54 million as opposed to a $10 million net loss in last year’s third quarter.
Renew Blue is the retailer’s multipronged strategy aimed at increasing sales and profitability. Hubert Joly, the company’s president and CEO, said Best Buy’s progress in this area included a 15.1 percent gain in domestic comparable online sales, continuing to enhance the company’s multichannel experience, completing this year’s optimization of Best Buy’s retail floor space and eliminating an additional $115 in annualized costs. Thus far this year, Best Buy has eliminated $505 million in annualized costs, with its target for the full year standing at $725 million.
Net sales in the quarter, which ended on Nov. 2, slipped 0.2 percent to $9.4 billion, but Best Buy also posted a gain of 1.7 percent in domestic same-store sales. The expense reduction in the quarter slimmed selling, general and administrative expenses by 6.6 percent in dollars and 150 basis points as a percentage of sales, to 21.9 percent. Gross margin was down 60 basis points to 23.2 percent.
For the fourth quarter, Joly said Best Buy’s mission is to continue to drive the Renew Blue transformation. He said the retailer will be “highly competitive” on price; deliver “a curated assortment of exciting new products”; enhance its multichannel experience; provide a highly trained sales force complemented by Apple, Samsung and Windows experts; give shoppers far greater access to inventory through its newly launched ship-from-store capability; offer free shipping for online orders of more than $25; and provide services through the Geek Squad, which is composed of experts in computers, home theater, digital cameras and other products.