Best Buy's 2Q online sales surge but challenges remain
NEW YORK (AP) — Best Buy Co. reported that online sales more than tripled in the fiscal second quarter, as shoppers bought computers, tablets and large appliances to help them cook, work and learn from home during the pandemic.
Overall, the nation's largest consumer electronics chain, based in Richfield, Minnesota, reported profits that beat analysts' expectations and overall sales rose 4% in the quarter ended Aug. 3. The strong numbers, announced Tuesday, follow standout performances from other big box stores like Target and Walmart, both of which have seen explosive growth in curbside pickup and other online services.
Best Buy said that sales growth was tracking 20% during the first three weeks of the current quarter compared to a year ago, but warned it will see a slowdown amid an uncertain environment. Shares fell on the news.
“We are still operating in a dynamic environment, and much uncertainty remains around future outbreaks, government stimulus efforts and the economic impact of sustained high unemployment levels and ongoing shutdowns that vary by industry,” Best Buy CEO Corie Barry told analysts during the call.
She and other executives also noted that Best Buy is still keeping up with surging demand for certain products, which is also constraining sales growth.
Barry said the federal stimulus money buoyed — at the very least — confidence if not discrete purchases during the fiscal first quarter and that continued through the second quarter. But she said it's hard to figure how much people are buying out of necessity.
“A lack of stimulus may only underscore the heightened levels of unemployment and lack of confidence," Barry said. “It’s hard to say how long the overhang of the last stimulus hangs on until hopefully the new stimulus is agreed...
