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11/23/2021

Best Buy taking measures to deal with rising theft; Q3 tops estimates

Marianne Wilson
Editor-in-Chief
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Best Buy
Best Buy has reported a strong third quarter.

Best Buy reported better-than-expected third-quarter earnings and sales as it continues to dive deeper into virtual health care and other new areas.

On the company's earnings call, CEO Corrie Barry said that theft is a growing problem at Best Buy stores. Her remarks came days after a series of retail thefts occurred in the San Francisco area. The stores targeted included Nordstrom, Burberry, Louis Vuitton and Bloomingdale's. 

"Across retail, we are definitely seeing more and more particularly organized retail crime," Barrie told analysts. "This is traumatizing for our associates and is unacceptable. We are doing everything we can to try to create an as safe as possible environments."

Barry said Best Buy is deploying added security measure to safeguard employees and shoppers, including locking up more merchandise (while still making for a good customer experience) and hiring security personnel where appropriate. 

"We’re working with our vendors on creative ways we can stage the product," she said.

In October, the consumer electronics giant said it would acquire Current Health, a U.K. care-at-home technology platform that brings together remote patient monitoring, telehealth and patient engagement into a single solution for healthcare organizations. That same month, the company rolled out an annual membership program, Totaltech, that costs $199.99 per year, includes free round-the-clock Geek Squad tech support and access to a 24/7 VIP service with dedicated phone and chat teams.

Best Buy reported net income of $499 million, or $2.00 per share, for the quarter ended Oct. 31, up from $391 million, or $1.48 per share, in the year-ago. Adjusted earnings per share were $2.08, beat analysts’ estimates $1.95.

Revenue rose to $11.91 billion from $11.85 billion last year and topped estimates of $11.65 billion. Domestic revenue edged up 1.2% to $10.99.

Enterprise comparable sales increased 1.6% compared to 22.6% growth in the year-ago period. Domestic comp sales rose 2%; international comp sales fell 3%.

Our omnichannel capabilities and our ability to inspire and support across all of technology in a way no one else can means we are uniquely positioned to seize the opportunity in this environment and in the future,” stated Best Buy CEO Corie Barry. “During the third quarter, we reached our fastest small-package online shipping times ever as our same-day delivery was up 400% and we nearly doubled the percent of products delivered within one day compared to last year.”

Best Buy CFO Matt Bilunas added that the company is looking forward to a string holiday season and is “extremely well-positioned with both the tech customers want and fast and convenient ways to get it.”

“We are committed to driving initiatives that will deliver future growth and our Q4 outlook reflects continued investments in our new membership program, technology, advertising and our health strategy,” he said.

On the company’s earnings call, Barry said that Best Buy is emphasizing fast delivery of online purchases and superior customer service to stand out from its rivals.

“The goal is to create an experience that makes it inconceivable for members to purchase their tech from anyone else, driving a larger share of consumer electronic spend to Best Buy,” Barrie said.

For the fourth quarter, Best Buy expects revenue of $16.4 billion to $16.9 billion with comparable sales between a 2% decline and 1% growth. Best Buy raised its revenue outlook from $51.0 billion to $52.0 billion to a range of $51.8 billion to $52.3 billion. Comparable sales growth is expected to be 10.5% to 11.5%, up from previous guidance for 9% to 11% growth. 

[Read More: Best Buy kicking off holiday with new price guarantee; in-store mobile checkout]