Best Buy reported strong topline, earnings and comp growth in the second quarter as its omnichannel focus, ecommerce sales and categories like appliances continued to be bright spots.
Ecommerce now represents about 15% of Best Buy’s overall sales, up from 13.2% a year ago; it has doubled from $3 billion six years ago to $6 billion today. Overall, online revenue was up 10.1% to $1.2 billion, due to higher conversion rates and increased traffic.
“We believe based on the most recent data we have, we are continuing to gain market share online,” said Best Buy CFO Corrie Barry in an earnings call. “Regarding our online comp specifically, I would add that the consumer electronics category is a more mature online category than several other retail categories, with customer buying patterns moving online earlier than most.”
Best Buy has been in omnichannel since before the term existed. Barry said the company has offered buy online and pickup in store for over 10 years, and ship from store at all its locations since 2014.
CEO Hubert Joly highlighted updates to the Best Buy app designed to improve the customer experience. The app’s home screen now displays an order ID barcode when an online order is ready for store pickup, reducing friction by speeding up the process. And to prevent customers from losing discounts gleaned from scanning product tags, a new scan history feature lets them reference discounts and continue their research after leaving the store.
“While we are of course focused on continuing to drive online revenue, we are more and more focused on how to build deeper relationships and drive total revenue from customers,” Joly said. “We are pleased with our overall revenue growth and the progress we are making on continuing to improve the customer experience across all the ways they want to engage with us.”
Overall, Best Buy reported a 4.9% increase in revenue to $9.4 billion, primarily driven by enterprise comp sales growth of 6.2%. Diluted earnings per share was up 32% to $0.91. In the U.S., sales increased 4.4% to $8.6 billion, driven by a 6% comp but partly offset by the loss of revenue from closing 292 Best Buy Mobile and 17 large-format stores in the past year.