Best Buy’s resurgence continues despite hot competition
The resurgence of electronics retailer Best Buy accelerated as the chain predicted a brighter future amid better-than-expected sales of products such as wearable technology, smart-home devices and appliances.
Best Buy’s comeback continued despite intense online competition from Amazon and brick-and-mortar rivals, suggest- ing the big-box chain is finding a sustainable path.
Second-quarter sales at stores open at least a year increased
5.4%, far outpacing S&P Global Market Intelligence estimates of
2.1%.
Encouraging sales of computing devices, smartphones, appliances, wearable technology and Internet-connected devices used in the home helped offset a decline in sales of tablet computers.
“Against a backdrop of continued healthy consumer confidence, we believe broad-based product innovation is resonating with consumers and driving high- er (spending),” Best Buy CEO Hubert Joly said in a statement. “And, with our effective merchandising and marketing activities, combined with our expert advice and service available online, in- store and in-home — we are garnering an increasing share of those dollars.”
The company raised its forecast for fiscal-year revenue growth from 2.5% to 4% and increased its projected operating income by half a percentage point to a range of 4% to 9%.
Best Buy plans to bear down on the message that it’s a font of tech expertise, expanding nationally a home adviser service it began piloting last year.
“What we’re seeing with home advisers is they unlock demand,” Joly said in an earnings call with media, noting that the size of or- ders generated by those house calls — in which trained sales people consult with homeowners on products they might find useful — tends to be larger than those in stores. “They help customers do things they would not otherwise have done.”
The company’s second-quarter revenue rose 4.8% to $8.94 billion, beating S&P Global Market Intelligence estimates of $8.67 billion. That included growth of more than 30% for online sales.
Net earnings totaled $209 million, up 5.6% from a year earlier, beating projections of $195 million.