Web sales drive all the growth at Best Buy
November 19, 2015 04:06 PM
BestBuy.com continues to account for all the revenue growth for Best Buy Co. Inc.
The consumer electronics and appliance retailer says online revenue was $709 million in the quarter ended Oct. 31, which is the company’s Q3 2016 fiscal reporting period. That’s up 18.0% year over year and an approximately $108 million difference from the $601 million it reported a year ago. At the same time, total domestic revenue—which includes web revenue—totaled $8.090 billion, up 1.3% from $7.992 billion a year ago, a difference of $98 million. Total revenue fell 2.4%.
This is at least the third straight quarter in which web gains have accounted for all revenue gains at Best Buy.
The retailer says increased traffic and higher conversion rates contributed to the Q3 online growth. BestBuy.com sales accounted for 8.8% of domestic revenue in the quarter, up from 7.5% a year ago.
In its Q3 call with analysts, Best Buy CEO Hubert Joly pointed to several web improvements made during the quarter. He noted Best Buy offered free two-day shipping to a “significantly increased number” of online customers, expanded limited-time flash sales and improved Best Buy’s mobile app. Near the end of Q3, it launched a Best Buy tablet app for iPad users.
For the three months ended Oct. 31, Best Buy reported:
- Total revenue of $8.82 billion, a decrease of 2.3% from $9.03 billion the same period a year ago.
- Online sales of $709 million, up 18.3% from a year ago. Best Buy did not disclose today what online sales were a year ago, but it previously reported it had $601 million in web sales in its fiscal 2015 Q3, a percent change of 18.0%.
- Domestic revenue, which includes web sales, totaled $8.09 billion, up 1.3% from $7.99 billion a year ago.
- International revenue totaled $729.0 million, down 29.9% from $1.04 billion a year ago. Best Buy last year closed 66 Future Shop stores and the FutureShop web business in Canada. It also is in the process or rebranding others stores under the Best Buy banner.
- Domestic comparable-store sales were up 0.8%, a decrease from 3.2% during Q3 last year. Best Buy includes web sales in its domestic comparable-store sales calculation. Best Buy’s domestic sales overall grew $98 million in the quarter, while web sales grew approximately $108 million. That means online sales drove all the revenue growth in the quarter, and revenue originating in stores declined.
- Net income of $125 million, up 16.8% from $107 million a year ago.
For the nine months ended Oct. 31, Best Buy reported:
- Total revenue of $25.91 billion, a decrease of 0.8% from $26.13 billion a year ago.
- Net earnings of $418 million, down 41.5% from $714 million.
- Best Buy did not release a year-to-date total for web sales, but based on previously released company figures, the total is $2.06 billion.
Best Buy is No. 14 in the Internet Retailer 2015 Top 500 Guide.