Best Buy (NYSE: BBY) reported significant restructuring costs for the first quarter. This reviewed the healthcare business, which has experienced slower performance than expected in the home care sector.
The company spent $109 million in the first quarter on restructuring costs, according to its revenue report. Costs were primarily related to asset disability.
According to Best Buy CEO Corie Barry, the company has expanded its home care business in recent years, but recently encountered complications with the segment.
“The business we call active aging, our lively business, or part of care in our home business, remains a very viable business model for the future,” Barry said in a first-quarter revenue call on Thursday. “Now it took longer to develop than I thought we were part of the very modest home health care we are working with some of the healthcare industry to offer.”
Barry cited two reasons for the complexity of the company's home service line.
“For one, some home exemptions are caught up in the budgeting conversations of many administrations, and are contradictory in terms of how long the exemption will last, so adoption of home solutions in large hospitals is only slowing down on a large scale,” Barry said. “The second is that some of our healthcare providers have just faced their own financial struggles over the past few years, and that's why we've been working to optimize that part of Best Buy's healthcare business.”
Barry said the “remaining” part of the healthcare business remains very viable.
Based in Boston, a subsidiary of Best Buy, Best Buy Health offers consumer health products, device-based emergency response services for aging people and virtual care.
In the first quarter, Best Buy's gross profit margin rose 23.5% from 23.4% in 2024, but that increase was eased by rate pressure on the healthcare business.
“The high gross profit margins were primarily due to improved financial performance from the company's services category, partially offset by rate pressure within the company's best buy health business and reduced profit-sharing revenues from the company's private label and co-branded credit card arrangements,” the company's revenue report read.
The company's overall revenue for the first quarter was $8.8 billion, a 0.9% DIP from the previous year.
The leader of Best Buy Health previously said the company has a “home in a health center.” In 2021, it acquired the current health of a home care technology company and launched a hospital partnership with Atrium Health in 2023.
