Best Buy’s Earnings Nearly Doubled in 2Q
Like Target, Richfield-based Best Buy Co. Inc. appears to be faring remarkably well during the pandemic. On Tuesday morning, Best Buy reported that its net earnings nearly doubled compared to the same quarter last year, hitting $432 million, or $1.67 per share.
Unsurprisingly, Best Buy also reported a massive uptick in online sales, which grew by 242 percent during the quarter. Digital sales accounted for more than half of the retailer’s total domestic revenue. For comparison, online sales made up just 16.1 percent of total domestic revenue in 2Q 2019.
Best Buy also benefited from the wave of white-collar workers who shifted to working from home. The retailer said it saw strong sales of computing products, appliances, and tablets. That helped offset a decline in sales of mobile phones.
Meanwhile, Best Buy’s total revenue almost hit $10 billion in the quarter. The retailer reported total revenue of $9.91 billion in Q2 2020 compared to $9.54 billion in the same quarter last year.
“Products that help people work, learn, connect and cook at home … were the largest drivers of our sales growth for the quarter,” CEO Corie Barry said in a news release.
But during a Tuesday morning earnings call, Best Buy execs appeared cautious about the future. The company isn’t releasing financial guidance for the next quarter, apparently due to ongoing uncertainty. Barry also said the federal government’s stimulus likely played a temporary role in boosting consumer confidence in the quarter. With Congress still deadlocked over another round of stimulus checks, it remains to be seen whether consumer will have the same purchasing power.
“I would note that we are planning for Q3 sales to be higher compared to last year but likely will not continue at the current quarter-to-date level of approximately 20 percent growth,” noted CFO Matt Bilunas.