Consumer Demand for Tech Boosts Best Buy Earnings
The Best Buy sales juggernaut keeps rolling. On Tuesday morning the company reported better-than-expected second quarter results: domestic comparable sales were up 20.8 percent pushing the company’s overall quarterly revenue to $11.85 billion—an increase of 19.6 percent compared to the second quarter a year ago.
“We are reporting record second quarter results today with comparable sales growth of 20 percent and operating income growth of 40 percent compared to last year,” said Corie Barry, Best Buy CEO, in a statement. “We are lapping an unusual quarter last year as our stores were limited to curbside service or in-store appointments for roughly half the quarter. When we compare to two years ago, our results are also very strong. Compared to the second quarter of FY20, revenue is up 24 percent and our operating income has more than doubled.”
The quarter that concluded on July 31 is the second quarter of the company’s fiscal 2022. The company is now forecasting full year revenue in the range of $51 billion to $52 billion.
Domestic online revenue was down 28.1 percent to $3.49 billion for the quarter. Online sales accounted for 31.7 percent of all domestic sales. It’s not a surprise to a decline in online revenue when comparing it to the second quarter last year when people were under pandemic lockdowns and ordering many things online.
The company still reports international results, but those numbers now only count stores in Canada. Late last year Best Buy made the decision to exit its operations in Mexico, closing 41 stores there.
When reporting its fiscal 2021 fourth quarter results in February, Best Buy disclosed that it had laid off 5,000 employees that month and expected more big-box store closures ahead due to changes in customer shopping patterns.
Best Buy, Target and other large retailers have benefitted from the pandemic. In Best Buy’s case the trend towards remote and mobile work has driven an increase in demand for technology.
“Over the longer term, we are fundamentally in a stronger position than we expected just two years ago,” Barry said in a statement. “There has been a dramatic and structural increase in the need for technology. We now serve a much larger install base of consumer electronics with customers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect permanent life changes, like hybrid work and streaming entertainment content.”