Sales for technology superstore Best Buy surged in the last quarter thanks to online shoppers.
The company reported its largest quarterly increase in online sales ever. Online sales for the company grew 242 percent in the U.S. compared to the year prior.
The Wall Street Journal reported that online sales more than tripled in the U.S. to $4.85 billion. Online sales for the company represent 53 percent of the region’s sales.
During the same quarter of last year, online sales were just 16 percent of Best Buy’s U.S. business.
Best Buy said sales and growth were fueled by consumers turning to the store to buy laptops, appliances, and other items that help them work and cook from home.
Overall, Best Buy reported total second-quarter sales rose to $9.91 billion, compared with $9.54 billion compared to last year.
CNBC reported that almost every merchandise category grew during the second quarter, with computing, tablets, and appliances driving sales.
Best Buy’s growth in online sales also had some negative impacts.
Yahoo Finance reported that gross profit margins in the quarter missed estimates because of the costs in fulfilling the substantial increase in online orders.
Best Buy has engaged in selling practices similar to other big-box retailers to accommodate shoppers during the coronavirus pandemic. These practices include curbside services and e-commerce orders to offset lost business from temporary store closures amid the Covid-19 pandemic.
Best Buy transitioned to a curbside-pickup-only model early on in the pandemic, despite the fact it could have kept its stores open as an essential retailer. It was not until early May that the company allowed customers into its stores to shop in an appointment-only model.
“Everything that people are doing right now is on the back of technology in their home, and it completely underscores our purpose and our philosophy. We’re seeing it across basically every aspect of what we’re selling in our stores,” CEO Corie Barry said on an earnings conference call.
Despite the growth in sales, the company’s stock fell today.
While Best Buy refused to provide financial guidance because of the coronavirus pandemic’s uncertainty, the indication it did give about third-quarter sales disappointed investors. The shares fell as much as 5.8 percent to $110.62. Through yesterday’s close, the stock had advanced 34 percent this year.
Chief Financial Officer, Matt Bilunas, cautioned the market by saying that growth in the third quarter was likely to slow, especially as the retailer incurs higher expenses as its stores are fully reopened.
“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.