Best Buy to Exit Operations in Mexico, Close 41 Stores
Richfield-based electronics retailer Best Buy Co. Inc. has announced plans to exit its operations in Mexico and close 41 stores there.
The news, which had not previously been disclosed by the company, was referenced in Best Buy’s third quarter earnings press release which was issued Tuesday morning. Even so, the news warranted only a single sentence in the statement.
Best Buy indicated that it would take $111 million in restructuring charges during the quarter “primarily related to charges associated with the company’s decision this quarter to exit operations in Mexico and actions to better align its organizational structure with its strategic focus.”
After departing Mexico, Best Buy’s remaining international operations will be exclusively in Canada.
With Mexico in the rearview mirror, Best Buy’s U.S. operations are going great guns as the pandemic continues to drive strong results.
Best Buy posted a 21.4 percent overall sales gain for the third quarter of its fiscal year 2021 ending Nov. 2 with $11.85 million in domestic and international sales.
The growth was driven by gains in three primary product categories – computing, home theater, and appliances – all of which are seeing gains as homebound customers look to make homes and home offices more comfortable. That was offset by a decline in mobile phone sales.
Domestic sales accounted for 91.5 percent of the company’s third quarter revenue. Domestic sales were up 21 percent compared to a year ago.
Domestic online revenue was up a dizzying 173.7 percent compared to the same period a year ago. For the third quarter, online revenue accounted for 35.2 percent of all domestic sales, up from 15.6 percent last year.
The big unknown remains how long the current unusual public health and pandemic economy will last.
“While the demand for the products and services we sell remains at elevated levels as we start the fourth quarter, it is very difficult for us to predict how sustainable these trends will be due to the significant uncertainty related to the various impacts of the pandemic,” said Best Buy CFO Matt Bilunas in a statement. “Thus, similar to the last two quarters, we are not providing financial guidance today.”