Best Buy customers flock to the web in Q4
February 25, 2016 12:23 PM
U.S. consumers spent $1.95 billion on BestBuy.com in the retailer’s fiscal fourth quarter, accounting for 15.6% of Best Buy Co. Inc.’s domestic revenue for the three-month period ended Jan. 30. That is an increase of 3.2 percentage points from the year-ago quarter.
In its fourth quarter and full-year earnings report released today, Best Buy says overall e-commerce revenue grew 13.7% year over year in Q4, while total domestic and international revenue fell. E-commerce revenue is factored into total domestic revenue, which totaled $12.51 billion in the quarter, down 1.5% from $12.70 billion. The retail chain says sales declines in sales of mobile phones, tablets, digital imaging and services contributed to the loss, and sales increases in home appliances, home theater and health and wearables products did not offset the losses. The retailer also pointed to the closure of 13 large-format stores and 17 Best Buy Mobile stores.
Best Buy endeavored to get an extra early jump on the holiday sales season. It was the first large retailer this year to move full-blast into holiday season messaging and promotions, based on an Internet Retailer analysis of the holiday promotions of the 100 largest e-retailers in North America. The consumer electronics retail chain began using its “win the holidays” theme on social media Oct. 6, and also promoted it on BestBuy.com. The company then added free shipping on all web orders for the season starting Oct. 25 and began airing its corresponding national TV campaign.
In January, Best Buy reported domestic online sales of $1.678 billion during the nine-week holiday shopping period ended Jan. 2, up 12.7% from $1.489 billion during the same time last year.
Best Buy did not release a full-year e-commerce figure, but based on previously released numbers web sales for fiscal 2016 totaled $4.01 billion, accounting for 10.1% of total revenue and 11.0% of domestic revenue. Best Buy’s 2016 fiscal year closed Jan. 30. Best Buy says comparable year-over-year online sales grew 13.5%. Best Buy greatly restructured its Canadian business during the fiscal year and is temporarily excluding Canadian online and store sales from its comparable sales calculations, the company says.
For the three months ending Jan. 30, Best Buys reported:
- Total revenue of $13.62 billion, down 4.2% from $14.21 billion the same period a year ago.
- Online sales of $1.951 billion, up 13.7% from $1.715 billion from a year ago. Best Buy did not disclose today what online sales were a year ago, but Internet Retailer calculated the figures based on the comparable sales change percent Best Buy released and on the percent of total Q4 domestic revenue Best Buy provided.
- Domestic revenue, which includes web sales, totaled $12.51 billion, down 1.5% from $12.70 billion a year ago. Best Buy says the web accounted for 15.6% of total domestic revenue in the quarter.
- International revenue totaled $1.12 billion, down 25.8% from $1.51 billion a year ago.
- Domestic comparable-store sales, which factor in web sales, declined 1.7%.
- Net income of $479 million, down 7.7% from $519 million.
For the 2016 fiscal year ended Jan. 30, Best Buy reported:
- Total revenue of $39.53 billion down 2.0% from $40.34 billion in fiscal 2015.
- Net earnings of $897 million, down 27.1% from $1.23 billion a year earlier.
- Best Buy did not report a full-year dollar total for online sales, however, based on previous company reports, Internet Retailer calculates Best Buy generated about $4.01 billion online during the year, up 13.3% from about $3.54 billion online a year earlier. Best Buy reported a comparable online sales change of 13.5%.
Best Buy is No. 14 in the Internet Retailer 2015 Top 500 Guide.