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Best Buy’s Q2 web sales climb 17%

August 25, 2015 03:30 PM
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Web sales continue to shine at Best Buy Co. Inc. The consumer electronics chain retailer says sales on BestBuy.com totaled $676 million in the quarter ended Aug. 1, which is Best Buy’s fiscal 2016 Q2 reporting period. It says that number is up 17.0% year over year but didn’t disclose prior year figures.

That means Best Buy generated 8.6% of its $7.88 billion in domestic revenue in the quarter online. A year ago Best Buy reported it generated $581 million online in the second quarter. Using that figure, Internet Retailer calculates web sales increased 16.4%, and the percentage of domestic revenue generated online a year ago was 7.7%.

Web sales contributed all of Best Buy's revenue growth. The retailer's total revenue increased $69 million year over year, while web sales increased $95 million year over year, based on company figures.

In its earnings release, Best Buy CEO Hubert Joly credited more traffic and higher conversion rates for the increase. In an earnings call, he also pointed to several website improvements made during to the quarter for helping drive sales. The retailer expanded payment options to include the ability for consumers to redeem American Express points. It also rolled out a "significantly more relevant" recommendation engine and the ability to search and shop by brand. 

Related: Increased traffic and conversion drive Best Buy’s web sales up 5% in Q1.

For the three months ended Aug. 1, the retailer reported:

  • Total revenue of $8.53 billion, an increase of 0.8% from $8.46 billion the same period a year ago.
  • Gross profit of $2.10 billion, or 24.6% of total revenue, up 6.1% from $1.98 billion and 23.4% of total revenue a year ago.
  • Online sales of $676 million, which Best Buy says is up 17.0% from a year ago. Best Buy did not disclose today what online sales were a year ago, but in an earnings statement from a year ago the retailer said it had $581 million in web sales during its Q2 2015, a 16.4% change.
  • Domestic revenue, which includes web sales, totaled $7.88 billion, up 3.8% from $7.59 billion a year ago.
  • Domestic comparable-store sales were up 3.8%, an improvement from a 2.0% decline a year ago. Best Buy includes web sales in its domestic comparable store sales calculation.
  • International revenue totaled $650 million, down 25.6% from $874 million a year ago.
  • Due to the store closures and the consolidation of remaining Future Shop stores in Canada under the Best Buy brand, and the closure of Future Shop’s e-commerce site, Best Buy no longer reports an international comparable-stores sales metric.
  • Net income of $164 million, up 12.3% from $146 million a year ago.

For the six months ended Aug. 1, Best Buy reported:

  • Total revenue of $17.09 billion, flat from $17.10 billion a year ago.
  • Gross profit of $4.13 billion, or 24.2% of total revenue, up 4.6% from $3.95 billion and 23.1% of total revenue a year ago.
  • Net earnings of $293 million, down 51.7% from $607 million a year ago.

Best Buy did not report a year-to-date total for online sales, but based on previous.

Related: Best Buy lays out a 5-point plan to boost web sales (2012).

 

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