MINNEAPOLIS-Ending a year of what it called “substantial progress,” Best Buy reported net income for both its fourth quarter and fiscal year ending on Feb. 1, as opposed to net losses for both periods one year ago.
Fourth-quarter net income totaled $293 million, compared to last year’s net loss of $409 million. For the fiscal year, net income was $532 million, compared to a net loss of $249 from the prior year.
Hubert Joly, Best Buy’s president and CEO, attributed the turnaround to the company’s progress in meeting its priorities under its Renew Blue initiative, designed to restore the retailer to profitability. Joly said the company reduced costs by $765 million last year, ahead of its Renew Blue target of $725 million. It also stabilized both the top and bottom lines, and delivered on a number of customer-service goals, including the rollout of its ship-from-store effort to more than 1,400 locations, increasing the number of Samsung and Apple stores-within-a-store, relaunching its credit-card and loyalty programs, transforming its online platform and customer database, and strengthening its balance sheet.
Total revenue in the quarter dropped 3 percent to $14.5 billion, including a decline in U.S. same-store sales of 1.2 percent. For the year, revenue was $42.4 billion, down 3.4 percent with U.S. same-store sales flat for the year.
Gross margin in the quarter decreased by 210 basis points to 20.2 percent. Selling, general and administrative expenses were down 7.5 percent in dollars and 80 basis points as a percentage of sales, to 16.1 percent.
“Our Renew Blue transformation is a multi-year journey,” Joly said, “and while it is off to an encouraging start, it is still in the early stages. As we move forward, we will continue to address three business imperatives: one, improving our operational performance; two, building foundational capabilities necessary to unlock future growth strategies; and three, leveraging our unique assets to create significant differentiation that is meaningful for our customers and our vendors.”