Q1 revenue and profit fell short of expectations! Best Buy learns from its mistakes and bets on medical e-commerce!

It is learned that Best Buy had a bad start in the first quarter, with sales increasing only 8% to $10.647 million and profits of $341 million, down 42.7% from the same period last year. With revenue and profits falling short of expectations, Best Buy is also facing the challenges of rising operating costs and high inflation, which will continue to erode its profits in the second quarter. For this reason, it has lowered its annual sales and profit expectations and decided to bet on the healthcare field, investing more money in this field.

Best Buy increases investment in healthcare sector

The company's chief financial officer, Matthew Bilunas, said that the bet on the healthcare strategy is putting pressure on the overall business, as spending in the healthcare sector increased in the first quarter. Previously, it acquired GreatCall, now Lively's connected medical technology company, for $800 million, and plans to develop in the direction of medical e-commerce.

Currently, health monitoring devices such as sports watches and blood pressure monitors are sold in Best Buy's online and offline stores. Since acquiring Current Health, a platform that provides virtual care and remote patient monitoring, for $400 million last November, Best Buy Health said its future is betting on the home health care market.

In addition, Best Buy has a team that can help buyers select health devices and set up remote home monitoring technology. Deborah DiSanzo, president of Best Buy Health, said the company will continue to invest in this area in the future.

Less retail and more healthcare

It is learned that Best Buy's healthcare business revenue in fiscal year 2021 was US$525 million. Healthcare customers including doctors, health systems, insurance companies and pharmaceutical companies only accounted for about 9% of Best Buy's health department revenue, and the other 91% came from the sales of medical equipment products, which shows the demand and prospects of this market in the United States. DiSanzo said that as Best Buy continues to occupy the US medical e-commerce market, it is expected that the revenue of this market segment will account for one-fifth of the total revenue in the next five years.

Editor ✎Estella/

Disclaimer: This article is copyrighted and may not be reproduced without permission.