Best Buy Reports Second Quarter Results

Enterprise Comparable Sales Increased 5.8%
Domestic Comparable Online Sales Increased 242%
GAAP Diluted EPS Increased 85% to $1.65
Non-GAAP Diluted EPS Increased 58% to $1.71

Best Buy Co., Inc. (NYSE: BBY) today announced results for the 13-week second quarter ended August 1, 2020 (“Q2 FY21”), as compared to the 13-week second quarter ended August 3, 2019 (“Q2 FY20”).

“Today, we are reporting strong quarterly results in the midst of unprecedented times,” said Corie Barry, Best Buy CEO. “We are encouraged to see the customer demand for our products and services and are proud of the amazing execution of our teams. However, we have not lost sight of the fact that people continue to suffer, and we extend our sympathy to all those who have lost someone to this virus, are sick with COVID-19 or are facing financial hardship as a result of the pandemic.”

Barry continued, “Enterprise revenue growth was almost 4%, even though our stores were open by appointment only for the first six weeks of the quarter. Products that help people work, learn, connect and cook at home, like computing, appliances and tablets, were the largest drivers of our sales growth for the quarter. Trends across most categories and services improved materially throughout Q2 as we opened our stores more broadly for shopping, especially categories like large appliances and home theater that benefit from more experiential shopping. Specifically, enterprise sales growth2 was approximately 16% in the last seven weeks of Q2 after we opened our stores and the strength continued into August, with sales up approximately 20% for the first three weeks of Q3.”

Barry concluded, “Clearly, we are still operating in a dynamic environment, and much uncertainty remains. At the same time, we are encouraged by our clarity of purpose and our momentum, which have guided and will continue to guide our operating model changes and investments. Our purpose to enrich lives through technology is more relevant than it has ever been, and we are confident regarding our execution, adaptability and the opportunities ahead.”

Domestic gross profit rate was 22.8% versus 24.0% last year. The gross profit rate decrease of approximately 120 basis points was primarily driven by higher supply chain costs as a result of the increased mix of online revenue and lower profit-sharing revenue from the company’s private-label and co-branded credit card arrangement.

Domestic GAAP SG&A was $1.56 billion, or 17.1% of revenue, versus $1.76 billion, or 19.9% of revenue, last year. On a non-GAAP basis, SG&A was $1.54 billion, or 16.9% of revenue, versus $1.74 billion, or 19.7% of revenue, last year. Both GAAP and non-GAAP SG&A decreased primarily due to: (1) reduced store payroll expense; (2) lower advertising expense; (3) reduced incentive compensation expense, as the company did not pay or accrue short-term incentive expense for second quarter performance; and (4) lower medical claims expense.

International revenue of $782 million increased 9.4% versus last year. This increase was primarily driven by comparable salesgrowth of 15.1%, which was partially offset by the impact of approximately 490 basis points of negative foreign currency exchange rates.

International SG&A was $142 million, or 18.2% of revenue, versus $166 million, or 23.2% of revenue, last year. SG&A decreased primarily due to lower payroll and benefit expense, primarily in Canada, and the favorable impact of foreign exchange rates.
more detail at: http://investors.bestbuy.com/investor-relations/news-and-events/financial-releases/news-details/2020/Best-Buy-Reports-Second-Quarter-Results/default.aspx