Best Buy said online sales represented 42% of its US revenue in the first quarter, but services like curbside pickup amid the COVID-19 pandemic weren't enough to offset store closures.
First quarter online revenue for Best Buy was $3.34 billion, up 155.4% from a year ago. Same store sales were down 5.3% in the first quarter.
The consumer electronics said it saw strong demand in computing and gaming, but other categories such as services and appliances fell. The company reported first quarter earnings of 61 cents a share on revenue of $8.56 billion, down from $9.14 billion a year ago. Non-GAAP earnings were 67 cents a share.
Wall Street was expecting first quarter adjusted earnings of 49 cents a share on revenue of $8.24 billion.
Simply put, Best Buy's first quarter could have been worse. Best Buy said it was able to retain about 81% of last year's sales during the last six weeks of the quarter. In the middle of the first quarter, Best Buy shifted to a curbside pickup model to fulfill online purchases. Best Buy, along with Target, Walmart and Amazon, are expected to be among the retail winners.
Today, Best Buy has shifted to an appointment driven approach to its stores to maintain social distancing. The COVID-19 pandemic has hurt Best Buy's services business that includes Geek Squad.
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Best Buy CEO Corie Barry said the retailer has benefited from multichannel investments made in recent years. "We have taken the opportunity to accelerate aspects of our strategy as this environment has quickly shifted the ways in which customers interact with retailers," said Barry.
As for reopening stores to more foot traffic, Best Buy said it was able to resume large product delivery, in-home installations and repairs in 80% of US zip codes for new orders. On May 4, Best Buy offered consultation services in store by appointment. About 700 stores, or 70% of the total footprint, are operating this way.
The company added that it is examining other store model tweaks such as expanding store hours and moving beyond appointment-only. Best Buy has suspended its guidance for fiscal 2021.