Best Buy Operations Loss Hits $13 Million In Q3
Best Buy losses continue to mount as the company reported a $13 million operations loss for Q3 2012. Best Buy is down $186 million compared to the same period year-over-year when it earned a profit of $173 million. Best Buy also announced that revenue declined from $11.15 billion in Q3 2011 to $10.75 billion in Q3 2012.
Domestic operating income also fell from $249 million to $50 million while domestic revenues declined by 4.7 percent to $7.7 billion. Based on those numbers, Best Buy witnessed a four percent decline year-over-year.
International business also declined with lower revenues in China and Canada and a lower gross profit in Europe. International profits witnessed a one percent decline. According to the company’s financial filing, store sales declined by 5.2 percent.
The one shining light for Best Buy has been a 10 percent increase for its online business, which took in $431 million. The online revenue increase has not countered in-store losses at this time.
Officials at the company have long complained that customers are using its stores as a showroom for products. After hands-on demonstrations in its stores, customers then log onto Amazon, Buy.com, and other online retailers in order to complete their transaction at a lower cost, often with free or discounted shipping.
Earlier this year, Best Buy announced plans to close 50 of its big box stores while opening upwards of 100 Best Buy mobile locations. The company is undergoing a massive restructuring plan meant to save $800 million by 2015.
With CDs being replaced by online downloads, TV sales slumping, and Apple eating into other electronics purchases, Best Buy has a long road to recovery ahead.