Vancouver-based Best Buy Canada’s operations are helping bolster its Minnesota-based parent Best Buy Co. Inc. (NYSE:BBY), according to the company’s earnings report today.
That is at least until currencies are factored in.
Best Buy Canada reported comparable sales that fell 9.3 per cent in the quarter that ended October 29. That was less than the 10.4-per-cent decline in comparable sales that company endured overall.
Unfortunately for Best Buy, when it repatriated revenue from its Canadian operations, it had to factor in what it called a 4.8-percentage-point hit from the Canadian dollar falling versus the U.S. greenback.
The end result was that when converted into U.S. dollars, its international division saw a 14.9-per-cent decline in overall revenue: to US$787 million, from US$925 million in the same quarter one year ago.
The company’s U.S. operations in the quarter generated US$9.8 billion in overall revenue, down nearly 10.8 per cent from more than US$10.9 billion in the same quarter in 2021.
That means that Canadian operations are about eight per cent of Best Buy’s overall revenue.
Best Buy Co. early in its last fiscal year closed all of its Mexico stores, leaving its entire international division based in Canada.
The company did not break out net income, or total profit, from its Canadian operations, but its gross-profit margin – its revenue minus its cost of goods – was 23.4 per cent in the quarter, compared with 25 per cent in the same quarter one year ago.
Best Buy CEO Corie Barry on this morning’s conference call described Canada as having “better-than-expected financial results.”
Investors saw Best Buy’s overall financial performance as better than expected, and sent the company’s share price up 12.78 per cent, to US$79.88.
Best Buy earned US$277 million, or US$1.38 per share, on US$10.59 billion in revenue in the quarter. Analysts had expected the company to earn US$1.03 per share on US$10.31 million in revenue.
The 10.4-per-cent decline in overall comparable sales was also better than the 12.9-per-cent decline that was expected.
The company said that sales in this fiscal year are likely to fall 10 per cent, which was less than the 11-per-cent decline that analysts expected.
Best Buy had already lowered its full-year guidance this summer.
Best Buy entered Canada when it bought B.C. entrepreneur Hassan Khosrowshahi's Future Shop electronics chain for $580 million in November 2001. For many years, it kept some stores branded Future Shop alongside others branded Best Buy. Eventually, however, it phased out the Future Shop store banner.
Best Buy Canada's original headquarters was in Burnaby but it completed a move to a new 77,500-square-foot Vancouver head office at 425 West 6th Ave., east of Cambie Street earlier this year.