Minneapolis — Online sales increased for Best Buy’s fiscal second quarter, falling in line with its Renew Blue turnaround plan, but revenue dropped and the retailer expressed concern for the rest of the fiscal year.
Noted Hubert Joly, Best Buy president and CEO, “In the second quarter, we delivered $8.9 billion in revenue and $0.44 in non-GAAP diluted earnings per share vs. $0.32 last year. The ongoing benefits of our Renew Blue cost reduction and other SG&A cost containment initiatives drove these better-than-expected results.”
However, comp-store sales dropped 2.7 percent vs. the prior-year period, with the CE sales segment declining 2.5 percent. Sharon McCollam, executive VP and CFO, attributed dropping sales to softness in the mobile phone category “ahead of highly anticipated new product launches,” which presumably means the upcoming iPhone 6.
McCollam also noted that “absent any change in these declining industry trends and with limited visibility to new product launch quantities, we continue to expect comparable sales to decline in the low-single digits in both the third and fourth quarters.”
Online sales, however, rose 22 percent, which Joly credited to the retailer’s Renew Blue plan. More specifically, the retailer said inventory availability was significantly improved by chain-wide rollout of its ship-from-store program.
“Looking ahead, our goal is to continue to create a differentiated multichannel customer experience such that every interaction customers have with us, regardless of channel, makes them a promoter of the Best Buy brand. In support of this, we will be intensifying our investments in customer-facing initiatives across both channels in the back half of the year,” said Joly.