Best Buy's Q2: Digital sales made up 53% of US revenue

The electronics retail giant said online sales climbed 242.2% and contributed more than of its domestic total revenue.

Best Buy said online sales accounted for more than half of total domestic revenue for the second quarter, continuing the trend among large retailers seeing digital sales soar throughout the coronavirus pandemic. 

The electronics retail giant said online sales climbed 242.2% and contributed 53.1% of domestic revenue. A year ago, pre-pandemic, Best Buy's digital sales were a mere 16.1% of revenue. 

Much of the digital increase was due to ongoing closures of Best Buy stores, which were open by appointment only for the first six weeks of the quarter. In the middle of the first quarter, Best Buy shifted to a curbside pickup model to fulfill online purchases. Nonetheless, the retailer's enterprise comparable sales rose 5.8% and its domestic same-store sales were up 5%. 

Today all of Best Buy's stores are open for in-person shopping, but the COVID-19 pandemic has had a negative impact on key revenue categories, including its services business and Geek Squad, as well as sales of mobile phones and digital imaging services. Best Buy said growth drivers were computing, appliances and tablets.

As for the rest of the numbers, Best Buy reported net income of $432 million, or $1.65 per share. Adjusted EPS was $1.71 on revenue of $9.91 billion, up from $9.54 billion a year ago. Analysts were expecting earnings of $1.04 per share on revenue $9.73 billion. 

Best Buy is cautious as it looks ahead to the third quarter. The company's CFO Matt Bilunas said Best Buy is planning for Q3 sales to be higher compared to last year, but noted that sales "likely will not continue at the current quarter-to-date level of approximately 20% growth." 

"Overall, as we plan for the back half of the year, we continue to weigh many factors including potential future government stimulus actions, the current shift in personal consumption expenditures from areas like travel and dining out, the possible depth and duration of the pandemic, the risk of higher unemployment over time, and the availability of inventory to match customer demand," Bilunas said.

Shares of Best Buy were down slightly in pre-market trading.