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Best Buy Earnings Exceed Expectations

Best Buy’s second-quarter earnings and sales topped analysts’ expectations as revenue approached $9 billion, up almost 5 percent, and same-store sales grew 5.4 percent.

Net income hit $209 million, from $198 million year over year. Based on the strong quarter the chain raised its revenue outlook for the full year to 4 percent growth, compared to a prior forecast of 2.5 percent growth.

Drilling down, comparable sales growth in computing, wearables, smart home, smartphones and appliances was partially offset by declines in tablets, the company said.

Best Buy chairman and CEO Hubert Joly, whose “Renew Blue” and “Best Buy 2020” initiatives have continued the company’s dramatic turnaround said in a statement: ““Our higher-than-expected comparable sales of 5.4 percent were driven by stronger consumer demand for technology products and by the strong execution of our strategy. Against a backdrop of continued healthy consumer confidence, we believe broad-based product innovation is resonating with consumers and driving higher spend. And, with our effective merchandising and marketing activities, combined with our expert advice and service available online, in-store and in-home – we are garnering an increasing share of those dollars.”

International same-store sales increased 4.7 percent, fueled by growth in Canada and Mexico, Best Buy said.

Perhaps most importantly, e-commerce sales grew 31.4 percent, as the company continues to try to head off Amazon’s momentum in the consumer technology space. Best Buy has committed more resources to its online operations, including improvements to its checkout and search functions, the company said. As a percentage of total domestic revenue, online revenue increased to 13.2 percent versus 10.6 percent last year.