Best Buy reported higher revenues, but lower profits because of heavy investments in building out its Best Buy Mobile locations in the remainder of all of its 973 U.S. stores. In the company’s second-quarter ended Aug. 30, it said revenue increased 12 percent to $9.8 billion, compared to the year-ago period. Net earnings totaled $202 million, falling 19 percent compared to $250 million in the prior year’s period. The drop was attributable not only to the mobile roll-out, but also international investments, a remodel of the GPS selling space and additional investments in store labor. Release.
The company did not break-out mobile revenues, however, it shed some light on the operations of the business both domestically and abroad. Here’s the highlights:
– Mobile Store Build-out: As planned, the company completed its deployment of the Best Buy Mobile experience to all 973 existing U.S. Best Buy stores. In Canada, it launched its first two Best Buy Mobile stand-alone stores and five store-within-a-store locations. In the U.S., there’s 21 Best Buy Mobile stand-alone stores.
– Mobile Growth: Best Buy said more attentive customer care in the mobile stores drove a strong double-digit gain in U.S. wireless connections in the second quarter (including prepaid and postpaid wireless connections as well as air cards). The company also experienced a nearly triple-digit gain in comparable store sales of mobile phones and accessories.
– Carphone Warehouse Acquisition: During the quarter, the company closed its acquisition of a 50-percent interest in the retail and distribution business of The Carphone Warehouse Group, which sells mobile phones and related products in 2,400 stores in nine European countries. This new venture is referred to by Best Buy as