Best Buy on Thursday reported quarterly earnings growth that beat most expectations, an early sign that a new omnichannel focus by the nation’s top consumer electronics chain is translating to improved sales.
The Richfield, Minn.-based company announced a 6.8 percent increase in net revenue, to $9.1 billion for the quarter that ended on May 5. Net earnings were $208 million for the period, or 72 cents per share.
“This strong performance was broad-based, with positive comparable sales across all channels, geographies and most of our product categories. The top-line strength is the result of continued healthy consumer confidence, product innovation in multiple areas of technology, and our unique value proposition resonating with customers,” Chief Executive Officer Hubert Joly said in a statement.
Despite the positive earnings report, Best Buy’s stock was down 4.33 percent in premarket trading to $3.29 per share.
Like most retailers, Best Buy is upending its strategy to reflect the growing threat posed by Amazon. Joly touted to investors the company’s renewed focus on its employees and highlighted how the retailer is trying to utilize technology in a “seamless and intuitive” way.
And like other businesses in the industry, Best Buy is investing in a more robust omnichannel experience in an attempt to grab customers both online and in-store. Even with a focus on e-commerce, however, online sales dropped to 12 percent this period. Same store sales, however, rose 7.1 percent in the period, a significant increase over the 1.6 percent growth in the prior year.
Best Buy recently rolled out nationwide a yearly membership program called “Total Tech Support” that offers technology repairs and assistance for products purchased at the retailer or elsewhere. The company is currently charging $199.99 a year for the service, more than the $119 Amazon charges for its own Prime membership service that includes perks like free shipping.
Despite the challenges posed by Amazon, Best Buy partnered with the e-commerce giant in the first period of the year to sell televisions that carry Amazon’s Fire operating system.
Best Buy is also giving in-store customers an option to research products without having to speak to a stores associate. The company’s app allows individuals to scan the barcodes of up to three products and compare them.
