While reporting a sales decline, Best Buy’s first quarter was better than expected, despite the retailer temporarily shifting to a contactless curbside-only operating model for all its domestic stores during the coronavirus pandemic.
Company-wide revenue in the first quarter ended May 2 was $8.56 billion, decreasing from $9.14 billion in revenue from the previous first quarter. Domestic revenue of $7.92 billion decreased 6.7% versus last year. The decrease was driven by a comparable sales decline of 5.7% and the loss of revenue from 24 permanent store closures in the past year. The largest comparable sales growth drivers were computing and gaming. These growth drivers were more than offset by declines in home theater, mobile phones, digital imaging and services.
Domestic online revenue of $3.34 billion increased 155.4% on a comparable basis due to higher conversion rates and increased traffic. As a percentage of total domestic revenue, online revenue increased to approximately 42.2% versus 15.4% last year. International revenue of $647 million decreased 2.1% versus last year.
Net earnings in the quarter came in at $159 million compared to $265 million in the previous first quarter. Diluted earnings per share in the quarter was $0.61 compared to $0.98 in the previous first quarter.
Starting March 22, the company proactively shifted to a contactless curbside-only operating model for all its domestic stores on an interim basis. At the beginning of the second quarter, on May 4, the company started welcoming customers back into its stores in ways that follow strict social distancing practices and use proper protective equipment. Specifically, the company began offering a new consultation service to customers in store, by appointment only. The company currently has nearly 700 stores, or approximately 70%, operating this way. In addition, the company is evaluating additional changes, including expanding store hours and opening some stores beyond the current appointment-only model.
Corie Barry, Best Buy CEO, said, “In the middle of the first quarter, we shifted all our stores to a curbside-only operating model and were able to retain approximately 81% of last year’s sales during the last six weeks of the quarter, even though not a single customer set foot in our stores. The strong sales retention is a testament to the strength of our multi-channel capabilities and the strategic investments we have been making over the past several years.”