SAN BRUNO, CALIFORNIA – (Photo by Justin Sullivan/Getty Images)
The headline is the same for the three quarters of this year: Better than expected sales and earnings for the 13-week third quarter ended October 30, 2021. Domestic comparable sales increased 2.0% on top of last year’s 22.6%. As a result, the company raised its comparable sales outlook to a range of 10.5% to 11.5%.
Management spoke, during the quarterly review meeting, about the need for speed and their ability to solve many requests in less than 24 hours. The quick solutions of problems and the ability to make rapid deliveries are some of the priorities of the company. It is paying off with customer’s acceptance.
The sales in the third quarter were helped by strong sales of appliances, home theater and mobile phones. These positive increases were partially offset by the decline in revenues in computing.
Domestic revenues of $10.99 Billion increased 1.2% versus last year. It was helped by comparable sales growth of 2.0%. However, it was partially offset by a loss of revenues from permanent store closures in the past fiscal year. Domestic on-line revenues of $3.44 billion decreased 10.1% on a comparable basis and as a percentage of total domestic revenues. On-line sales decreased to approximately 31.3% versus 35.2% last year.
Management addressed the delivery problems of merchandise to U.S ports and from parts to the company. Early in the year it planned to begin the fourth quarter with higher inventory. The company’s inventory at the end of the third quarter was 14.6% higher than last year. It should give the company a good start in the critical final holiday quarter.
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Management addresses the shortage problem which is probably due to organized crime. It increased the inventory shortage for the quarter.
Management’s health strategy is laudable. Since technology plays a vital part, health care is growing rapidly and virtual care is becoming a key driver. It helps aged people at home and gives the company more growth opportunity.
For the fourth quarter the company is projecting revenues of $16.4 to $16.9 billion. The company expects comparable sales of -2.0% to +1.0%. For fiscal 2022 the company looks for revues of $51.8 billion to $52.3 billion. This is an increase from the earlier projection of $51.0 to $52.0 billion.
POSTSCRIPT: Best Buy’s service wins customers. Its new membership offers many advantages and cements relationships. I am sure we will see better than projected results for the fourth quarter and in the next year.
