This week, multinational consumer electronics retailer Best Buy released information about the first quarter of 2020. Interestingly, net-income fell to $159 million or 61 cents per share. Thus, compared to the same period in 2019, net income dropped from $265 million or 97 cents per share to $159 million or 61 cents per share. Nevertheless, excluding items, Best Buy earned 67 cents per share.
Moreover, revenue declined to $8.56 billion. Last year, the company’s revenue was $9.14. However, the revenue in the first quarter of this year, still surpassed expectations as analysts expected that revenue would reach $8.16 billion.
Also, same-store sales declined by 5.3%. Furthermore, domestic same-store sales fell by 5.7% and the international same-store sales were down 0.2%
Online sales in the U.S. increased by 154.4% as online sales became the only option for people who wanted to shop at Best Buy.
Best Buy and financial problems
Best Buy withdrew its fiscal 2021 financial outlook. Moreover, Best Buy used the full amount of its $1.25 billion revolving credit facility and it also suspended all share buybacks.
According to CEO Corie Barry company would reduce the number of employees by about 51,000 employees. Also, it plans to take other cost-cutting measures.
It is no secret that the coronavirus pandemic is a major challenge for the global economy and consumer electronics retailer Best Buy is not an exception. The revenue, as well as earnings, dropped in the first quarter of 2020.
Notably, later in the quarter, it decided to shut stores and switched to only curbside pickup outside of the stores. This decision helped to protect the health of clients and employees, but it harmed the revenue. Furthermore, Best Buy temporarily suspended all in-home installations and repairs.
Nevertheless, the company was able to adapt and continued to serve customers. Despite the fact, that Best Buy restricted access to its stores. Also, the company was able to retain about 81% of last year’s sales during the last six weeks of the quarter.