Best Buy reports decline in first quarter sales

Best Buy Co. Inc. announced results for the 13-week first quarter ended May 2, 2020, as compared to the 13-week first quarter ended May 4, 2019. As shown on the tables below, all three major operating segments, combined, dropped 5.3%

	Q1 FY21			Q1 FY20
Revenue ($ in millions)
Enterprise	$	8,562		$	9,142
Domestic segment	$	7,915		$	8,481
International segment	$	647		$	661
Enterprise comparable sales % change1		(5.3)	%		1.1	%
Domestic comparable sales % change1		(5.7)	%		1.3	%
Domestic comparable online sales % change1		155.4	%		14.5	%
International comparable sales % change1		0.2	%		(1.2)	%
Operating Income
GAAP operating income as a % of revenue		2.7	%		3.7	%
Non-GAAP operating income as a % of revenue		2.9	%		3.8	%
Diluted Earnings per Share (“EPS”)
GAAP diluted EPS	$	0.61		$	0.98
Non-GAAP diluted EPS	$	0.67		$	1.02

“On behalf of all of us at Best Buy, I want to extend our sincere appreciation and gratitude to all those who are on the front lines working to keep us safe or maintain essential services, and we offer our heartfelt sympathy to all those who have lost someone to this virus or who are sick with COVID-19,” said Corie Barry, Best Buy CEO. “Our leadership team has been responding to the evolving situation with a focus on keeping our customers and our employees safe while we meet our customers’ needs.”

“In the middle of Q1, we shifted all our stores to a curbside-only operating model and were able to retain approximately 81% of last year’s sales2 during the last six weeks of the quarter, even though not a single customer set foot in our stores,” Barry continued. “The strong sales retention is a testament to the strength of our multi-channel capabilities and the strategic investments we have been making over the past several years.

“The COVID-19 pandemic has changed the way we work, learn, care for ourselves and, importantly, connect with each other. Against that backdrop, our purpose has never been more relevant: to enrich lives through technology. It is because of that purpose that we were, in virtually every jurisdiction with a stay-at-home order in place, designated an essential retailer because of the products and services we offer.”

“As a result of the ongoing uncertainty related to COVID-19, we suspended all FY21 financial guidance on March 21 and are not providing guidance today,” says Matt Bilunas, CFO, Best Buy. “Our priority has been and will continue to be the safety of our employees and customers while providing essential products and services during this time. We remain thoughtful about managing our profitability and liquidity, balancing our short-term decisions to navigate this unprecedented situation while preserving the elements of our strategy that will ensure we remain a vibrant company in the future.”

Domestic Revenue

Domestic revenue of $7.92 billion decreased 6.7% versus last year. The decrease was driven by a comparable sales1 decline of 5.7% and the loss of revenue from 24 permanent store closures in the past year.

The largest comparable sales growth drivers were computing and gaming. These growth drivers were more than offset by declines in home theater, mobile phones, digital imaging and services.

Domestic online revenue of $3.34 billion increased 155.4% on a comparable basis1 due to higher conversion rates and increased traffic. As a percentage of total Domestic revenue, online revenue increased to approximately 42.2% versus 15.4% last year.

International Revenue

International revenue of $647 million decreased 2.1% versus last year. This decrease was primarily driven by the impact of approximately 320 basis points of negative foreign currency exchange rates, which was partially offset by revenue from new stores opened in Mexico in the past year.