The multinational retailer reported earnings well beyond investors’ expectations as it posted a revenue of $11.85 billion with an EPS of $2.06 while Wall Street expected the revenue to be $11 billion with earnings of $1.71 per share.
Best Buy posted a net income of $391 million, or $1.48 per share, for the third quarter. The figures are well above last year’s net income of $293 million, or $1.10 per share. Same-store sales grew 23% overall. The U.S same-store sales jumped by 22.6% while globally they were 27.3% up.
The electronics retailer has seen massive growth in its online sales as online revenue soared by 174% to $3.82 billion in the third quarter alone – crossing the e-commerce sales during the last holiday season. For online revenue, this was the second-best quarter in the U.S for Best Buy. Online sales made up more than a third of the total sales, as compared to 15.6% at the same time last year.
Best Buy saw a boost for stay-at-home products as people needed more technology to work and study from home. The demand for home electronics and entertainment products also boosted the company’s sales. The company’s CEO Corie Barry said that Best Buy is working quickly to try approaches that can lead to more sales, serve customers in unique ways, and run its e-commerce platform more efficiently.
The firm has remodeled four stores in the Minneapolis area out of which, in one store, the square footage and the number of products on display were reduced to test new models. Another store is located next to a warehouse with a drive-through where people can either curbside pickup or retrieve their online orders in lockers.
Best Buy refrained from providing an outlook for the next quarter owing to the uncertainty caused by the pandemic. However, Chief Financial Officer Matt Bilunas, revealed that they believe the company’s sales trend would not remain at the level it experienced during quarter 3. He said that there will be higher supply chain costs from parcel surcharges, pointing out that videogame consoles – much sold during the holiday season – are lower-margin products.
Owing to uncertainty about the next quarter and a lack of outlook by the company, Best Buy’s shares slipped 5% in early trading on Tuesday. Overall, the shares have gone up by 39% since the start of this year, giving the company a market cap of $31.6 billion.
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
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