Best Buy effectively coaxed a record number of shoppers into its big-box stores over Black Friday weekend last month with some impressive brand-name price cuts on major CE products including HD sets, and now the company said it's paying the price with third-quarter earnings in its fiscal year that are below expectations.
Still, Best Buy's top exec said, the chain does not regret its marketing aggressiveness and would do it all over again. Black Friday, Nov. 24, was Best Buy's busiest U.S. shopping day ever, with an estimated 3 million customers.
CEO Brad Anderson said his outlets' price cuts (perhaps highlighted by a Panasonic 42-inch plasma HD set that briefly sold for $1,000) helped the retailer earn higher market share and reinforce customer loyalty, as well as to pick up a lot of new customers as the chain heads into the last crucial couple of weeks of the holiday season.
Anderson said Best Buy gained market share in flat-panel TV sets (mostly HD) and notebook computers (it was selling a Toshiba laptop for $250) and sold a lot of gift cards. The gross profit rate for the quarter was 23.5 percent of revenue, down nearly 1 percent from last year. Income for U.S. operations fell 6 percent to $186 million for the quarter, according to the company.
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