What does this mean-- Best Buy has no strategy for omnichannel and ecommerce?
Best Buy Sales Fall As Customers Keep Shopping Online
Best Buy reported $8.9 billion in second quarter revenue, a 1.5% decline over the $9.3 billion reported this time last year and a figure that came in a little under the $8.97 billion the Street expected. Net income for the quarter was $146 million, resulting in GAAP earnings of 42 cents per share. Excluding special items, Best Buy posted earnings of 44 cents per share, up from the 32 cents per share reported in the year-ago quarter and well above the 31 cents per share analyst consensus.
Domestic same store sales fell 2%, while sales in consumer electronics fell 2.5%. The one bit of good news for the retailer is that for all the customers staying at home, some are at least shopping on BestBuy.com rather than, say, Amazon.com: Best Buy reported that its domestic online comparable sales increased 22% for the quarter.
“Like other retailers and as reflected in this quarter’s performance, we continued to see a shift in consumer behavior: consumers are increasingly researching and buying online. As a result, traffic to our brick and mortar stores continued to decline, yet our in-store conversion and online traffic continued to increase,” Hubert Joly, Best Buy president and CEO, said in a statement Tuesday morning. Joly went on to add that Best Buy’s plan for the future is to capitalize on this shift in shopping patterns.
“Looking ahead, our goal is to continue to create a differentiated multi-channel customer experience such that every interaction customers have with us, regardless of channel, makes them a promoter of the Best Buy brand,” he said. “In support of this, we will be intensifying our investments in customer-facing initiatives across both channels in the back half of the year.”
Following the release of the earnings results, shares of Best Buy fell more than 4% in early Tuesday trading and are currently down 4.5%. Year-to-date, the stock looks even worse: it’s down 21% since the first trading day of 2014.
Some analysts were surprised by the stock’s venture into the red; Citi analyst Kate McShane said in a Tuesday morning note that she and her team were “surprised by the negative pre-market reaction, considering the 13-cent EPS beat vs. consensus.” McShane also wrote that she expects comparable store sales to “improve sequentially as we think Q2 was impacted by a lack of demand for mobile phones as consumers wait for new product. We are buyers on weakness today,” she said.