Best Buy Reports Record Quarter

Nationwide electronics retailer Best Buy has reported a record $59 million in profits for the second quarter of its fiscal year. Profits were up 34% from the previous year, according to a September 15 report in the Wall Street Journal. The Eden Prairie, Minnesota-based chain is one of the largest outlets for consumer electronics, and is Circuit City's only serious rival.

The encouraging report was mitigated somewhat by Best Buy's statement that its profit margin would shrink during the next quarter. The company has pushed back its launch date for e-commerce to early next year. Best Buy executives said they had hoped to go online by Christmas, but the task of preparing their website was so overwhelming that they were forced to delay. Many Internet startups offering electronics have popped up recently. Some pundits predict that the smaller operations won't fare well against giants like Best Buy and Circuit City, which took sales online in July. Others believe there is room for everybody.

The announcement of the delay of its "e-tail" operation disappointed Best Buy's investors and caused the company's shares to drop $5.9375, or 9.8%, to $54.56/share on Tuesday, September 14. Despite smaller-than-expected gains for electronics retailers in August, the market for consumer electronics remains strong. Best Buy CEO Richard Schulze said, "We don't see any change in the appetite of our consumers." This highest-profit quarter marked the first time Best Buy has sold more movies on DVD than on VHS tape, the Journal reported.