Sales were both helped and hurt by the demise of its longtime competitor Circuit City, which went shuttered its retail locations earlier this year. Best Buy picked up some market-share sales after its competitor liquidated its nationwide network of stores, but also received some stiff competition by the fire sale prices of Circuit City's clearance sales.
For the quarter, Best Buy's profit dropped 23% to $570 million compared with $737 million in the like period in the year earlier.
"We prepared for reduced consumer spending, and we were pleased when the quarter finished stronger than it began," Best Buy chief executive Bradbury Anderson said in a statement Thursday.
Jim Muehlbauer, the big-box retailer's executive VP of finance, indicated the company is planning to remain nimble as it prepares "for a wide variety of scenarios in consumer demand." He continued: "Opening fewer new stores this year supports our goal of increasing our free cash flow and is prudent, given the current environment."
Best Buy, which has been moving to expand its European business, said it will delay new store openings there. "We currently are anticipating grand opening a small number of U.K. large-format stores and supporting e-commerce platform in the spring of calendar 2010," said Muehlbauer.
The company said its home-office category -- representing 30% of U.S. revenue -- enjoyed an 8.1% sales gain. Its mobile phone category had nearly triple-digit comparable-store sales gains. Best Buy has staked out the mobile phone sector for emphasis and has trained sales personnel in making handsets and devices easy to use for consumers.
With Circuit City now history along with the earlier demise of CompUSA, Best Buy will be facing Wal-Mart as a competitor in the consumer electronics area.
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