Consumers hunger for electronics continues to grow, and Best Buy (Nasdaq: BBY) is feeding that need. The Richfield, Minn.-based company announced record sales of $11.8 billion and income for Fiscal Year Q2 ending July 31. The amazing 20% growth in sales and 40% growth in income not only blows away last year’s results, which were subdued due to the pandemic, but still represent 24% growth in sales over the same timeframe in 2019 before COVID-19.
The company specifically cited home theater, appliances, computing, mobile phones and services, which would include custom installation, as the largest contributors to growth.
“We are reporting record second quarter results today with comparable sales growth of 20% and operating income growth of 40% compared to last year,” says Corie Barry, Best Buy CEO. “We are lapping an unusual quarter last year as our stores were limited to curbside service or in-store appointments for roughly half the quarter. When we compare to two years ago, our results are also very strong. Compared to the second quarter of FY20, revenue is up 24% and our operating income has more than doubled.”
Barry continues, “Customer demand for technology products and services during the quarter remained very strong. Customers continued to leverage technology to meet their needs, and we are providing solutions that help them work, learn, entertain, cook and connect at home. The demand was also bolstered by the overall strong consumer spending ability, aided by government stimulus, improving wages and high savings levels.”
Barry adds, “I am so proud of the execution of our teams as they continue to evolve our operating model and safely meet the needs of our customers. To all of our associates across the company, I thank you for your customer obsession, perseverance and ingenuity.”
“Over the longer term, we are fundamentally in a stronger position than we expected just two years ago,” Barry continues. “There has been a dramatic and structural increase in the need for technology. We now serve a much larger install base of consumer electronics with customers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect permanent life changes, like hybrid work and streaming entertainment content. Our unique omnichannel assets, including our ability to inspire what is possible across the breadth of CE products as well as our ability to keep it all working together the way customers want, truly differentiate us going forward in this new landscape.”
Best Buy Financial Forecast Upgraded
“Based on the strength of the business and our expectations for continued customer demand as we lap the strong comparable sales growth from the second half of last year, we are raising our outlook for the year,” says Matt Bilunas, Best Buy CFO. “For the second half of FY22, we expect our comparable sales to be in the range of flat to down 3% versus last year, compared to our previous annual outlook that implied a high single-digit decline.”
The company has changed its revenue outlook for the year from $51 billion up to $52 billion, representing an overall increase in sales of between 9% and 11% compared to the company’s previous prediction of just 3% to 6% growth. For Q3 this year, the company is anticipating revenues between $11.4 billion and $11.6 billion, which is a sales decline of -1% to -3%.
In a clear sign that consumers are returning to in-person shopping, Best Buy’s online revenues declined 28.1% for the quarter to $3.49 billion. Online revenues represented 31.7% of total sales in the U.S., compared to 53.1% of all sales in the same quarter last during the pandemic.
In total, Best Buy’s U.S. revenue of $11.01 billion was an increase of 20.6% versus last year. The increase was primarily driven by comparable sales growth of 20.8%, which was partially offset by the loss of revenue from permanent store closures in the past year. The company’s domestic gross profit rate was 23.7% versus 22.8% last year.