Minneapolis -- Best Buy Co. earned $146 million in the second quarter, down from $266 million in the year-ago period, topping analysts earnings estimates even as its revenue fell short. Its results were helped by ongoing cost reductions. Best Buy cut $40 million in annual costs last quarter, bringing the total to $900 million.
For the quarter ended Aug. 3, revenue dropped to $8.89 billion from $9.27 billion. Analysts had expected $8.99 billion. Same-store sales fell 2.7%, which was more than analysts had expected.
Online sales rose 22%, helped by the company’s new ship-from-store capabilities.
“Like other retailers and as reflected in this quarter’s performance, we continued to see a shift in consumer behavior: consumers are increasingly researching and buying online,” stated Best Buy CEO Hubert Joly. “As a result, traffic to our brick and mortar stores continued to decline, yet our in-store conversion and online traffic continued to increase due to the execution of our Renew Blue strategy, which is in direct alignment with this shift.”
Best Buy’s Renew Blue strategy is designed to grow its online business, enhance its in-store customer experience, and leverage its multichannel capabilities.
“Looking ahead, our goal is to continue to create a differentiated multi-channel customer experience such that every interaction customers have with us, regardless of channel, makes them a promoter of the Best Buy brand,” Joly said. “In support of this, we will be intensifying our investments in customer-facing initiatives across both channels in the back half of the year.”