Best Buy’s second quarter was good but not great.
Earnings came in at $US0.44 per share, which was stronger than the $US0.31 expected by analysts.
However, comparable store sales fell by 2.7%, which was worse than the 2.2% decline expected.
Best Buy’s online sales jumped by 22% during the period, but it wasn’t enough to offset the 0ngoing decline in its stores.
“Like other retailers and as reflected in this quarter’s performance, we continued to see a shift in consumer behaviour: Consumers are increasingly researching and buying online,” CEO Hubert Joly said. “As a result, traffic to our brick-and-mortar stores continued to decline, yet our in-store conversion and online traffic continued to increase due to the execution of our Renew Blue strategy, which is in direct alignment with this shift.”
Renew Blue is the name for management’s comprehensive plan to boost online sales, while also trying to incentivise consumers to come into its stores.
Best Buy CFO Sharon McCollam pointed to some other issues hurting sales.
“[I]ndustry-wide sales are continuing to decline in many of the consumer electronics categories in which we compete,” she said. “We are also seeing ongoing softness in the mobile phone category ahead of highly anticipated new product launches. Therefore, 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.”
Best Buy shares are up 3.1% in pre-market trading.
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