Financial results for the first fiscal quarter of 2016 were released by Best Buy, one of the largest consumer electronics retailers in the world.
Best Buy's domestic segment revenues in the first quarter rose 1.4% year-over-years to $7.89 billion. This indicated good growth rate for the retail industry that has regularly witnessing fall in revenues and negative comps in the past few years.
On an enterprise basis, Best Buy's comparable sales were up 0.6%, which was much better than last year's comparable store sales growth rate of (1.8) %. Online revenues were up 5.3% compared against 29.2% in the year ago quarter.
There was 1% decline year-over-year to $8.56 billion in Best Buy's total enterprise revenues. However, the electronics retailer was capable of increasing its gross profit by 3% year-over-year to $2.03 billion.
There was also improvement in Best Buy's gross profit margin year-over-year. It grew from 22.8% in the first quarter of last year to 23.7% in the most recent quarter.
However, Best Buy's underlying business results in the first quarter were partially compensated by restructuring charges ($186 million) that occurred in the first quarter.
Consequently, Best Buy's operating income declined from $210 million in 1Q 2015 to just $86 million in 1Q 2016. Its operating income margin fell from 2.4% a year ago to just 1.0%.
However, regardless of a significant amount of restructuring charges taken in the first quarter, Best Buy's earnings weren't too bad. The company said that it had adjusted diluted earnings of $0.37 per share compared against $0.35 per share last year.
The drivers of the company’s better-than-expected first quarter financial results were merchandising, marketing and operational execution.
However, it believes that the cumulative impact of the company’s progress has improved its multi-channel customer experience, which allowed it to outperform in the market consistently.