Electronics retailer Best Buy Co. Inc. generated $1.42 billion in U.S. online sales during the second quarter of its fiscal year 2020 ended Aug. 3, which represents 16.1% of its overall revenue. That’s a 17.4% increase over the same period last year, when it generated $1.21 billion online or 14.0% of its total U.S. revenue.
Higher average order values and increased traffic led to the earnings bump, Best Buy said in its earnings release, but it didn’t disclose what led to those increases. The electronics chain also debuted the ability for customers to trade in phones for new devices through its online store this quarter, something Best Buy previously only offered in its stores, noted CEO Corie Barry in an earning call transcribed by Seeking Alpha.
Total revenue increased 1.7% year over year to $9.54 billion from $9.38 billion, falling short of analyst expectations. With increased tariffs on electronics manufactured in China starting in the second half of the year, Best Buy could face struggle with added costs of imports on headphone and small electronics, which lead its growth for the quarter.
Best Buy is No. 13 in the Internet Retailer 2019 Top 1000.
In other earnings news:
- Apparel retailer Abercrombie & Fitch Co. (No 72) reported double-digit online sales growth for its second fiscal quarter ended Aug. 3, but didn’t break out exact figures. Overall sales were flat and the retailer lowered its forecast for the rest of the year as tariffs loom in the Chinese-made goods many apparel brands sell.
- Beauty retailer Ulta Beauty (No. 88) rolled out the ability to buy items online and pick them up at any store, and transitioned its Romeoville, Illinois, distribution center to an ecommerce fulfillment center, helping the company post nearly 30% ecommerce growth for its second fiscal quarter ended Aug. 3. Ulta does not break out exact ecommerce figures or growth, but reported that it hit the high end of its expected 20% to 30% growth target. It expects similar growth for the full year. Total sales rose 12.1% to $1.67 billion from $1.49 billion during the same period last year.
- Fitness upstart Peloton (No. 284) filed for an initial public offering this week, seeking to raise $500 million on the public market. The company, which sells internet-connected stationary bikes and treadmills, along with subscriptions to workout classes that run on those devices, is generating an increasing amount of revenue from its subscriptions. In its fiscal year 2019, ended June 30, the company made 78.6% of revenue on its fitness devices, compared to 83.9% in 2017. The bikes, sold online and in 74 retail stores, lose much of their functionality without the fitness class subscription. Peloton didn’t break out ecommerce sales in its filing documents, but the manufacturer is losing money in part due to outsized marketing. The company lost $196 million on sales of $915 million during the last fiscal year, according to its filing. That compared with a loss of $48 million on $435 million in sales during the same time period a year earlier. Sales and marketing cost is the largest portion of Peloton’s operating expenses.