Best Buy's CEO Brian Dunn said Tuesday that consumer traffic at its stores is lumpy with customers splurging for big tech launches and then pulling back. Apparently, Sprint's HTC 4G Evo is shaping up to be a big event.
Dunn, speaking on an earnings conference call following disappointing first quarter results, said the "4G HTC Evo is the best selling device in Best Buy Mobile." Dunn added that "Android platform sales are outstanding."
The comments come amid a big Best Buy miss. The company reported first quarter earnings of $155 million, or 36 cents a share, on revenue of $10.78 billion. Wall Street was looking for earnings of 50 cents a share on revenue of $10.93 billion. Nevertheless, Best Buy reiterated its fiscal 2011 outlook.
"This quarter's earnings were below our expectations," said Dunn, who cited higher expenses and "variability in customer traffic." Dunn added that there was "consumer volatility week to week and month to month" and that spending was "episodic."
Simply put, consumers "spend well on important events and then pause." Big events like the launch of the Apple iPad bring out traffic, but then dissipate.
Dunn, however, remained upbeat because there is "no shortage of enhancements to consumer technology this year." "This industry is loaded with a lot of interesting product launches in the back half," said Dunn.
Here's where Best Buy sees growth ahead for the rest of its fiscal year:
- Smart TVs. Dunn cited Google TV and a "great deal of interest" in 3DTV as potential growth areas. To ride shotgun with smart TVs, Best Buy is going to focus on Internet TV connectivity as well as mobile and home broadband.
- Gaming. Dunn was upbeat about the game software cycle in the back half of year. Microsoft's Kinect and 3D firmware updates to the Sony Playstation can drive sales.
- Tablet computers. Best Buy was "thrilled" to bring the iPad to its stores and Dunn said that the company will aim to ramp up its tablet selection.
- Best Buy Mobile. Dunn added that Sprint's 4G HTC Evo has been the retailer's best selling smartphone. Meanwhile, Android sales have been strong. Naturally, Dunn was upbeat about the iPhone 4 launch. See all 4G coverage.