Home Theater Helps Drive Best Buy’s 23% Q3 Revenue Growth

With online sales as the main growth driver, Best Buy’s (NYSE: BBY) third quarter report for fiscal 2021 certainly reflects the impact of COVID-19. Online sales represented 35% of the company’s total revenue for the 13-week third quarter ended October 31, 2020.

Overall, the Richfield, Minnesota, company had sales of $ 11.8 billion, of which $ 10.85 billion in the United States. That US revenue is a jump of 21%. Worldwide sales increased 23% compared to the third quarter of the previous year. Going forward, given the ongoing pandemic, the company has been cautious about where the market might go.

Meanwhile, Best Buy says the number of customers using its Total Tech Support service program has remained constant at 2.3 million, but interaction increased during the pandemic.

“For Total Tech Support, we’ve increased membership after having been fairly constant in the first half of the year,” says CEO Corie Barry. “We haven’t updated this number quarterly and we won’t do it now. But for reference, the last one we shared was around 2.3 million members as of the end of fiscal 2020. We’ve definitely seen the use of the remote support offering continued to increase during the pandemic. And we’ve also seen improved trends compared to earlier in the year when it comes to things like installation and repair. “

Barry added, “Today we are reporting strong quarterly results again in an unprecedented time. Our like-for-like sales increased a remarkable 23% as we used our unique capabilities, including our supply chain expertise, flexible store operations model, and ability to quickly migrate to digitization, to meet the significantly increased demand for products that customers enjoy while they work , Learning and cooking help, entertain and connect in their homes. The current environment has underscored our intent to add technology to life, and the skills we use and strengthen now will help us execute our strategy in the future. “

Barry continues, “Our teams have shown empathy, ingenuity and exceptional performance throughout the quarter. I take great pride in the way our teammates help not only our customers, but also each other and their communities. “

“From a profitability perspective, our better than expected sales resulted in a significant increase in the operating profit rate and profit growth,” continues Barry. “This strong financial performance enables us to share our success with the community, our shareholders and, most importantly, our employees. We recently made a $ 40 million donation to the Best Buy Foundation to accelerate progress toward our goal of reaching 100 Teen Tech Centers in the United States. In addition, we plan to resume our share buyback program in the fourth quarter of this fiscal year. “

Adds Barry, “For our employees, we’ve increased our starting wage to $ 15 an hour, paid our field reps rewards, and reintroduced our short-term performance compensation. In the early days of the pandemic, we set up an employee hardship fund that continues to provide emergency funds to our employees who are sick, have sick relatives, or are in financial need. In addition, we have resumed our 401 (k) Employer Match in the last few weeks and have invested heavily in our services for the benefit of our employees. “

Matt Bilunas, Chief Financial Officer of Best Buy, said: “Although demand for the products and services we sell remains high at the beginning of the fourth quarter, it is very difficult for us to predict how sustainable these will be due to the significant uncertainty surrounding them Trends will be the various effects of the pandemic. Therefore, as in the last two quarters, we are not giving any financial forecasts today. “

It is best to buy US numbers

Domestic sales of $ 10.85 billion were up 21.0% year over year. The increase was mainly driven by comparable sales growth of 22.6%, which was partially offset by the loss of sales from permanent store closings in the past year.

From a merchandising perspective, the company had comparable sales growth across most of its categories, with computers, home theater, and home appliances being the biggest drivers. These growth drivers were partially offset by a decline in mobile phone sales.

Domestic online sales of $ 3.82 billion rose 173.7% on a like-for-like basis, and as a percentage of total domestic sales, online sales increased approximately 35.2% from 15.6% last year.

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