Those who are predicting the end of Best Buy are sorely mistaken. The company shattered the Wall St. expectations for its Q2 revenues and profits reporting continued, albeit slight, retail comparable sales growth of 0.8 percent, and aggressive online sales growth of 24 percent for the second straight quarter. Analysts have been predicting falling retail sales from Best Buy, but it isn’t happening. Last year, the company had 3.8 percent retail sales growth.
Overall, the No. 2 company on the CE Pro 100 reported domestic revenue of $7.9 billion, an increase of 0.1 percent versus last year driven by comparable sales growth of 0.8 percent, partially offset by the loss of revenue from 12 large format and 22 Best Buy Mobile store closures.
The product categories of growth were health & wearables, home theater, major appliances and computing, which was partially offset by declines in mobile phones and gaming. Domestic online revenue reached $835 million, an increase of 23.7 percent on a comparable basis primarily due to increased traffic, higher average order values and higher conversion rates. From a profit standpoint, the company brought 24 percent to the bottom line domestically.
Wall Street’s reaction has been enthusiastic. At press time, the company’s stock was up 19 percent on the day, or $6.28 to $39.08 per share.
“Our teams delivered a strong second quarter, with better-than-expected revenue and profitability in both our Domestic and International businesses,” said Best Buy chairman and CEO Hubert Joly, noting that the company continues to deliver cost savings and drive efficiencies in the business, which is critical to its ability to invest in the future.
Joly continued, “We are encouraged by the quality of our execution, the momentum in our business and the strength of our first half financial results. We are excited by our mission to help customers live their lives and pursue their passions with the help of technology and the growth opportunities this mission creates for us. I want to thank our associates across the company for their focus and work to deliver every day on this mission.”