Once again, Best Buy reported staggeringly good quarterly financial results, boosted by a pandemic that has kept shoppers snapping up appliances and electronics.
The retailer said on Tuesday that second-quarter revenue surged 20% to $11.85 billion, well above Wall Street forecasts. More than a year after the lockdowns that changed how Americans live and work, consumers have continued to buy electronics for their home offices, home theaters, and update appliances. And CEO Corie Barry says those changes are proving sticky. Revenue was 24% higher than the same quarter in 2019.
“There has been a dramatic and structural increase in the need for technology,” Barry said on a media briefing. “We now serve a much larger install base of consumers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect permanent life changes, like hybrid work and streaming entertainment content.”
Also helping have been stimulus money and Congress’ push for more widely available broadband, as well as higher savings and wages.
Still, she said, the question marks around when people will return to offices, which in theory would crimp business, are making it tougher to forecast business in the second half of the fiscal year. Apple, Facebook and Amazon are among the major employers to delay a return to the offices by a few months because of the Delta variant.
“The environment as it relates to the pandemic is still rapidly evolving and there is uncertainty,” from return to the office and return to school, she added. Still, despite those caveats, Best Buy raised its sales estimates and anticipates revenue this fiscal year will range from $51 billion to $52 billion and that same-store sales will grow between 9% to 11%, well above its previous forecast for 3% to 6% growth.
Moody’s retail analyst Charlie O’Shea was particularly impressed by Best Buy’s rising profit margins, that showed it can go toe-to-toe with Amazon. Best Buy’s numbers “are particularly impressive given that the quarter included meaningful promotional activity to compete with Amazon’s Prime Day,” he wrote.
“We are fundamentally in a stronger position than we expected to be in just two years ago,” said Barry.
Wall Street seemed to agree as shares rose nearly 8% on Tuesday morning.
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