Best Buy Co.’s quarterly earnings fell 29% as the electronics retailer kicked off the holiday season with significant discounting and sales weakness in most products besides mobile devices.
The company has seen its profits come under pressure in recent quarters as it battles competition from online and discount stores like Amazon.com Inc. and Wal-Mart StoresInc. The company has responded by ramping up its online and mobile offerings, while also setting plans to trim its square footage of “big box” retail stores by 10% over the next five years.
In its just-ended fiscal third quarter, domestic gross margin fell by 1.3 percentage points, suggesting that while the company increased sales, it did so in large part by offering discounts.
“They were more promotional and that doesn’t bode well for the holiday season, which is going to be very, very intense,” Barclays Capital analyst Alan Rifkin said.
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