Best Buy Reports 3Q Net Income Jump, Profit Margin Fall

New York City, Best Buy Co. reported net income of $150 million for the fiscal third quarter ended Nov. 25, compared with $138 million a year earlier. Comp-store sales rose 4.8% for the quarter. The company also said revenue rose 16% to $8.47 billion, beating analysts' average forecast of $8.45 billion. The addition of 227 new stores added during the past 12 months contributed to this gain.

Best Buy said its gross profit rate for the third quarter was 23.5% of revenue, down from 24.4% a year earlier.

Factors including increased sales of lower-margin products, such as notebook computers and video-game consoles, and hefty promotions during the Thanksgiving holiday shopping weekend, are likely attributed to the decline, according to the company.