Best Buy (NYSE: BBY) announced third quarter results Tuesday which surpassed Wall Street’s expectations. However shares dropped amid news that the chain would be closing down 41 locations in Mexico.
“Despite this extraordinary work [of our collaborators], the effects of the pandemic have been severe, and it is not viable for us to maintain our business in Mexico,” said Fernando Silva, president of Best Buy Mexico, according to the Yucatan Times.
Within the report, the company revealed it has taken a restructuring charge of USD111 Million during the third 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.”
The company reported earnings of USD2.06 in comparison to Refinitiv’s consensus estimated USD1.70 a share. Revenue amounted to USD11.85 Billion, higher than analysts anticipated USD11 Billion. Additionally same store sales experienced 23% growth versus the anticipated 13.6% increase.
Best Buy has not provided a forecast for the fourth quarter as a precaution to the ongoing uncertainty brought on by the COVID-19 pandemic. Chief Financial Officer Matt Bilunas mentioned in a conference call that the retailer will have greater supply chain costs due to parcel surcharges and sales from video game consoles, a highly requested holiday gift that has a low margin.
“We believe our Q4 sales growth will be positive, but we don’t expect sales trends to remain at the levels we experienced during Q3,” he said.