Another strong online sales quarter has electronics retail chain Best Buy Co. Inc. on pace to blow past the $5 billion mark this year, according to CEO Hubert Joly.
Best Buy, No. 10 in the Internet Retailer 2017 Top 500, reported U.S. online sales of $1.100 billion. during its fiscal second quarter of 2018 ended July 29, up 31.2% from $838.4 million during the same time last year. The retailer attributed its second quarter online sales growth to unspecified spikes in both conversion rate and traffic.
Best Buy did not provide an online sales dollar figure for the first six months of its fiscal 2018, but it did report that online sales have grown 26.8% year over year. Based on Best Buy’s 10-Q filing with the U.S. Securities and Exchange Commission, where it reported that online sales accounted for 12.9% of domestic revenue in Q1 2018, or $1.021 billion, Best Buy has generated about $2.121 billion so far in domestic online sales so far this year.
This is the third consecutive quarter during which online sales have exceeded the $1 billion mark, something Joly attributes to changing shopper behaviors.
“Much of the customer experience has been starting online,” Joly told analysts on the call, according to a transcript from Seeking Alpha. “What we’re seeing today is a continued effect of the cumulative investments we’ve made in simplifying and streamlining the customer experience. There is a lot of details that you do to tweak and eliminate the frictions in logging and checkout, every step in the journey.”
Many of those online orders also touch a Best Buy store.
“So much of what we do online is enabled by the stores, with 50% of it either picked up in or shipped from a store,” chief financial officer Corie Barry said. “The goal, at the end of the day, is to make the store as productive as possible, not close them.”
For the second quarter of fiscal 2018 ended July 29, Best Buy reported:
- Total revenue of $8.940 billion, up 4.8% from $8.533 billion during the same time last year.
- Domestic revenue of $8.272 billion, up 4.9% from $7.889 billion.
- A net profit of $209 million, up 5.6% from $198 million.
For the first six months of fiscal 2017, Best Buy reported:
- Total revenue of $17.468 billion, up 2.9% from $16.976 billion during the same time last year.
- Domestic revenue of $16.184 billion, up 3.0% from $15.718 billion.
- A net profit of $397 million, down 7.0% from $427 million.