Best Buy Reports Second Quarter Results

“I am incredibly proud of our teams as they continue to rise to the challenges of the past few years and I remain impressed with their ability to lead through the rapidly shifting business environment,” said Corie Barry, Best Buy CEO. “Our comparable sales were down 12.1% as we lapped strong comparable sales growth last year of 19.6%. Our online sales penetration, at 31% of our total Domestic sales, is almost twice as high as pre-pandemic Q2 FY20 while our diluted EPS grew over 40% versus Q2 FY20.”

“We are clearly operating in an uneven sales environment,” continued Barry. “As we entered the year, we expected the consumer electronics industry to be softer than last year following two years of elevated growth driven by unusually strong demand for technology products and services and fueled partly by stimulus dollars. The macro environment has been more challenged due to several factors and that has put additional pressure on our industry.”

Barry continued, “We are focused on balancing our near-term response to difficult conditions and managing well what is in our control, while also delivering on our strategic initiatives and what will be important for our long-term growth. This includes actively assessing further actions to evolve our operating model, manage profitability and iterate on our growth initiatives. Our strategy, and our confidence in it, remains unchanged. We have exciting opportunities ahead of us in a world that is more reliant on technology than ever. We are a financially strong company with a resilient, world class team that will successfully navigate the current environment.”

*Domestic revenue of $9.57 billion decreased 13.1% versus last year primarily driven by a comparable sales decline of 12.7%.
*Domestic online revenue of $2.97 billion decreased 14.7% on a comparable basis, and as a percentage of total Domestic revenue, online revenue was 31.0% versus 31.7% last year.
*Domestic gross profit rate was 22.0% versus 23.7% last year. The lower gross profit rate was primarily due to: (1) lower services margin rates, including pressure associated with the Best Buy Totaltech membership offering; (2) lower product margin rates, including increased promotions; and (3) higher supply chain costs.
*Domestic GAAP SG&A was $1.73 billion, or 18.1% of revenue, versus $1.85 billion, or 16.8% of revenue, last year.
*International revenue of $760 million decreased 9.3% versus last year. This decrease was primarily driven by a comparable sales decline of 4.2% in Canada and the negative impact of approximately 420 basis points from foreign currency exchange rates.
*International gross profit rate was 23.4% versus 24.3% last year. The lower gross profit rate was primarily driven by lower product margin rates.
*International SG&A was $150 million, or 19.7% of revenue, versus $160 million, or 19.1% of revenue, last year.
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