During the first six weeks of Q2, Best Buy stores were open by appointment only.
Online sales increased 242% year over year in the second quarter ended Aug. 1 for Best Buy, but the rest of the year could see slower revenue growth overall for the retail chain.
Same-store sales increased 5.8%, beating Wall Street expectations of 2.3%. Total revenue reached $9.91 billion, up about 4% year over year, Best Buy said Tuesday. That beat analyst expectations of $9.71 billion in Q2 revenue. U.S. revenue was almost $9.13 billion, up about 3.4% in the second quarter.
“Today, we are reporting strong quarterly results in the midst of unprecedented times,” said Corie Barry, Best Buy CEO. “We are encouraged to see the customer demand for our products and services and are proud of the amazing execution of our teams. However, we have not lost sight of the fact that people continue to suffer, and we extend our sympathy to all those who have lost someone to this virus, are sick with COVID-19 or are facing financial hardship as a result of the pandemic.”
During the first six weeks of Q2, Best Buy stores were open by appointment only, she said, though most stores have now reopened. The retailer also has limited inventory for some products, which also slowed sales growth.
“Trends across most categories and services improved materially throughout Q2 as we opened our stores more broadly for shopping, especially categories like large appliances and home theater that benefit from more experiential shopping,” Barry said. “Specifically, enterprise sales growth was approximately 16% in the last seven weeks of Q2 after we opened our stores and the strength continued into August, with sales up approximately 20% for the first three weeks of Q3.”
Even so, uncertainly abounds for the coming months and into the 2020 holiday shopping season.
“As a result of the ongoing uncertainty, we are not providing financial guidance today,” Best Buy CFO Matt Bilunas said. “However, I would note that we are planning for Q3 sales to be higher compared to last year but likely will not continue at the current quarter-to-date level of approximately 20% growth. Also, as our stores are fully reopened, we are planning for Q3 SG&A expense to be more in line with last year’s third quarter.”
Bilunas describe the factors that will impact only Best Buy for the remainder of the year but other retailers as well.
“Overall, as we plan for the back half of the year, we continue to weigh many factors including potential future government stimulus actions, the current shift in personal consumption expenditures from areas like travel and dining out, the possible depth and duration of the pandemic, the risk of higher unemployment over time, and the availability of inventory to match customer demand,” he said.