Best Buy Delivers Growth Up Against A Surging Amazon
As Australian CE and appliance retailers bet on their future up agaist Amazon and manufacturers. who have moved to sell online up against their retail partners, US retailer Best Buy has demonstrated with their latest earning that there is a growth model ahead, however there are some pitfalls.
In the last quarter Best Buy’s top and bottom lines showed major improvements, in the three months, ended May 5, net earnings rose 10.6 percent, to $208 million, and total U.S. revenue was up 6.3 percent, to $8.4 billion, despite the closures of 17 big-box and 193 mobile stores.
Despite the growth shares in Best Buy were down nearly 8 percent due ostensibly to a slowdown in online growth which is tipped to have gone to Amazon.
On the product front, standout categories for the quarter included mobile phones, appliances, computing, tablets and smart home, while online sales rose on higher average order totals and higher conversion rates.
E-commerce now represents 13.6 percent of total domestic revenue, up from 12.9 percent for the year ago period, the company said.
Comp sales increased 7.1 percent, and domestic online revenue rose a respectful 12 percent, to $1.1 billion, albeit a falloff from the fourth quarter’s 17.9 percent spurt and the 22.3 percent increase for the three months before that.
Chairman/CEO Hubert Joly said “We are happy to report better-than-expected top- and bottom-line results for the first quarter,” he said, and cited positive comps across all regions, distribution channels and most product categories.
He credited the results to “healthy consumer confidence,” product innovation, and Best Buy’s business model, which includes a heaping helping of services and Blue Shirt assistance.