Best Buy reported a 4% year over year revenue decline, with Q2 2015 sales falling to $8.89 million. Quarterly comparable store sales decreased 2.7%, with company executives expecting the low single-digit decline to continue into Q3 and Q4 2015.
The retailer earned a net profit of $146 million in the quarter, or $0.42 in GAAP diluted earnings per share, but the number fell 45% from the $226 million posted in Q2 2014.
Best Buy implemented the Renew Blue cost reduction strategy, which is designed to increase the company’s online business in alignment with the decline of brick-and-mortar store traffic. Under the strategy, the retailer saved $40 million, bringing the cumulative total of annualized cost reductions to $900 million.
Advertisement
“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,” said Hubert Joly, President and CEO of Best Buy. “In support of this, we will be intensifying our investments in customer-facing initiatives across both channels in the back half of the year.”
Comparable online sales increased 22%, with the company attributing the increase to:
- Improved inventory availability resulting from the ship-from-store capability that was implemented in January 2014;
- A higher average order value; and
- Increased traffic driven by a greater investment in online digital marketing.
“Industry-wide sales are continuing to decline in many of the consumer electronics categories in which we compete,” said Sharon McCollam, EVP, CAO and CFO of Best Buy. “We are also seeing ongoing softness in the mobile phone category ahead of highly-anticipated new product launches.”
