American company Best Buy has decided to restructure its operations.
This statement came after the announcement of the financial result, according to which the revenue of the firm in one quarter shrank by ten percent to stand at $14.7 billion US dollars.
The press service Best Buy also mentioned that the financial hardship imposed on the market by consumers led to the downturn. The company has experienced drops in the sales of home cinema systems, domestic appliances, and cell phones during the previous few months but limited growth in revenues from gaming and tablet settings.
That said, in the fourth quarter of FY 2022, Best Buy saw its gross profit fall to $2.9 billion. Operating income also saw a significant decline by 25% as it came down to $597 million For the same quarter, operating income barely managed a strong positive return, recording a margin of 23% at $150 million. Simultaneously, other sales metrics also fell, leading gross sales for that quarter to fall by nine percent over the previous year’s period.
In the official report to BSE, it said that there was a steady decline in consumers’ activities through electronic channels for the forecast period, and for the previous year there was a contraction in comparable sales that reached 3%–6%. This decline was set to stay steady with a gross expenditure level close to $850 million. It has already been stated that the demand in the electronics sector will continue to dwindle in the upcoming year. Sales revenue cut-off point to once again dip in 2023.
In the upcoming financial year, Best Buy is set to cut down its retail network by a range of 20 to 30 big box stores, refurbish 8 of its Experience stores, as well as set up around 10 more outlet stores. In the last 3 years alone, the retailer has closed about a fifth of its staff, or about 25000 employees, because of a decreasing number of customers. The company spent $86 million in the fourth quarter of last year to restructure its business.
