Best Buy reports strong third-quarter results
Best Buy Co., Inc. announced third-quarter results showed comparable stores sales were up 23%, compared to the 13-week third quarter ended Nov. 2, 2019. Best Buy’s domestic revenue of $10.85 billion increased 21.0% versus last year., driven by comparable sales growth of 22.6%, which was partially offset by the loss of revenue from permanent store closures in the past year. The company generated comparable sales growth across most of its categories, with the largest being computing, home theater, and appliances. This were partially offset by a decline in mobile phone sales.
Domestic online revenue of $3.82 billion increased 173.7% on a comparable basis, and as a percentage of total domestic revenue, online revenue increased to approximately 35.2% versus 15.6% last year.
“Today, we are once again reporting strong quarterly results in the midst of unprecedented times,” said Corie Barry, Best Buy CEO. “Our comparable sales grew a remarkable 23% as we leveraged our unique capabilities, including our supply chain expertise, flexible store operating model and ability to shift quickly to digital, to meet what is clearly elevated demand for products that help customers work, learn, cook, entertain and connect in their homes. The current environment has underscored our purpose to enrich lives through technology, and the capabilities we are flexing and strengthening now will benefit us going forward as we execute our strategy.”
“From a profitability standpoint, our better-than-expected sales resulted in significant operating income rate expansion and earnings growth,” Barry continued. “This strong financial performance is allowing us to share our success with the community, our shareholders, and, importantly, our employees. We recently made a $40 million donation to the Best Buy Foundation to accelerate the progress towards our goal to reach 100 Teen Tech Centers across the U.S. In addition, we plan on resuming our share repurchase program during Q4 of this fiscal year.
“For our employees, we raised our starting wage to $15 per hour, paid recognition bonuses to field employees and reinstated our short-term incentive compensation. In the early days of the pandemic, we established an employee hardship fund that continues to provide emergency funds to our employees who are sick, have loved ones who are sick or are experiencing financial hardship,” said Barry. “In addition, in recent weeks, we have resumed our 401(k) employer match and invested significantly in our employee well-being benefits.”
Best Buy CFO Matt Bilunas said, “While the demand for the products and services we sell remains at elevated levels as we start the fourth quarter, it is very difficult for us to predict how sustainable these trends will be due to the significant uncertainty related to the various impacts of the pandemic. Thus, similar to the last two quarters, we are not providing financial guidance today.”
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Q3 FY21 |
Q3 FY20 |
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Revenue ($ in millions) |
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Enterprise |
$ |
11,853 |
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$ |
9,764 |
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Domestic segment |
$ |
10,850 |
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$ |
8,964 |
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International segment |
$ |
1,003 |
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$ |
800 |
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Enterprise comparable sales % change1 |
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23.0 |
% |
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1.7 |
% |
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Domestic comparable sales % change1 |
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22.6 |
% |
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2.0 |
% |
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Domestic comparable online sales % change1 |
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173.7 |
% |
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15.0 |
% |
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International comparable sales % change1 |
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27.3 |
% |
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(1.9) |
% |
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Operating Income |
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GAAP operating income as a % of revenue |
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4.7 |
% |
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4.0 |
% |
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Non-GAAP operating income as a % of revenue |
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6.1 |
% |
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4.2 |
% |
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Diluted Earnings per Share (“EPS”) |
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GAAP diluted EPS |
$ |
1.48 |
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$ |
1.10 |
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Non-GAAP diluted EPS |
$ |
2.06 |
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$ |
1.13 |
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For GAAP to non-GAAP reconciliations of the measures referred to in the above table, please refer to the attached supporting schedule.