Friday, 20 July, 2018

Best Buy closing its 250 mobile phone stores in the US

A Best Buy mobile phone store in New York Best Buy closing its 250 mobile phone stores in the US
Nellie Chapman | 02 March, 2018, 07:54

The No.1 United States consumer electronics retailer also benefited from better product availability and the decline or exit of some competitors, Best Buy Chief Financial Officer Corie Barry said in a statement. Operating income is also expected to be flat.

The company's overall sales at established stores rose 5 percent, fueled by a 9 percent gain at its low-price chain Old Navy.

Excluding one-time items, Best Buy earned $2.42 a share, which was 38 cents higher than analysts' expectations, based on a Thomson Reuters survey. Not that we'd attempt to downplay the closing of physical CE retail footprint, but the Best Buy Mobile locations are literally just a blip on the radar for the company from booth a revenue and total square footage perspective.

Sales at established stores jumped 9 percent in the fourth quarter ended February 3, triple the average estimate of analysts for a 2.9 percent increase, according to Consensus Metrix.

Shares of the company traded up more than 1 percent Thursday morning on the news. The closures won't affect Best Buy's mobile stores in Canada, and the company will continue to sell mobile phones both online and in its "big-box" stores.

Revenues rose 14.0% from previous year to $15.36 billion, compared with analysts' view for $14.52 billion.

Best Buy Chief Executive Hubert Joly said in the memo that the mobile stores' margins had become "compressed" and that "the cost of operations in our mobile standalone stores is higher than in our big box stores".

"As much as this format once allowed Best Buy to tap into a very fast-growing category, cell phone sales growth is now far less impressive", Saunders said.

Best Buy Co said Wednesday it will be closing all of its 250 mobile-phone stores in the U.S. by end of May.

Gap's fourth-quarter profit fell 7 percent, but the clothing retailer reported strong holiday sales and increased its dividend.

Revenue climbed to $15.36 billion, while analysts were calling for sales of $14.51 billion. Best Buy's shares rose more than 3 percent to $75.30.