Best Buy's online sales increase 22% in Q2
August 26, 2014 11:32 AM
E-commerce was a bright spot for Best Buy Co. Inc. in the second quarter of its 2015 fiscal year. The $581 million in sales the consumer electronics retailer generated online for the quarter ended Aug. 2 is a 21.8% increase from the $477 million it reported for the same quarter a year ago.
That web growth comes despite a 4.0% decline in total sales; Best Buy today reported it generated $8.90 billion in revenue, down from $9.27 billion a year ago.
Best Buy CEO Hubert Joly pointed out how consumers’ movement to the web is affecting store traffic. Domestic comparable-store sales were down 2.0%; Best Buy includes revenue from the web in its comparable stores calculation. “Consumers are increasingly researching and buying online. As a result, traffic to our brick-and-mortar stores continued to decline, yet our in-store conversion and online traffic continued to increase,” he said.
Joly cited the retailer’s ship-from-store program, higher average order values and better digital marketing programs that drove more traffic to BestBuy.com as reasons why online sales increased in Q2.
For the three months ended Aug. 2, Best Buy reported:
- Total revenue of $8.90 billion, a decrease of 4.0% from $9.27 billion the same period a year ago.
- Gross profit of $2.06 billion, or 23.1% of total revenue, down 16.3% from $2.46 billion and 26.5% of total revenue a year ago.
- Online sales of $581 million, up 21.8% from a year ago. Best Buy did not disclose today what online sales were a year ago, but it previously reported it had $477 million in web sales in its fiscal 2014 Q2.
- Domestic revenue, which includes web sales, totaled $7.59 billion, down 2.4% from $7.78 billion a year ago.
- International revenue totaled $1.31 billion, down 12.1% from $1.49 billion a year ago.
- Domestic comparable-store sales were down 2.0%, a further decrease from a 0.4% decline during Q2 last year. Best Buy includes web sales in its domestic comparable store sales calculation.
- International comparable-store sales were down 6.7%, a decline from a 1.8% decline a year ago.
- Net income of $146 million, down 45.1% from $266 million a year ago. The retailer says cost reduction and cost containment initiatives are ongoing.
For the six months ended, Aug. 2, Best Buy reported:
- Total revenue of $17.93 billion, a decrease of 3.7% from $18.61 billion a year ago.
- Gross profit of $4.08 billion, or 22.8% of total revenue, down 11.7% from $4.62 billion and 24.8% of total revenue a year ago.
- Net earnings of $607 million, up 228.1% from $185 million a year ago.
Best Buy is No. 15 in Internet Retailer’s Top 500 Guide. Internet Retailer estimates Best Buy’s online sales grew 19.69% from 2012 to 2013.