February 27, 2020
Best Buy Feb. 27 said it expects interruptions from the global coronavirus outbreak to impact first half-year store results.
Like many retailers, Best Buy generates much of its product inventory from China, which, as the epicenter of the COVID-19 virus, has seen many manufacturing facilities shuttered over worker safety concerns.
“This is a very fluid situation, which makes it difficult to determine exact financial impacts from disruptions in supply chain,” CFO Matt Bilunas said in a statement.
The CFO said the retailer views the situation as a relatively short-term disruption that would not impact Best Buy’s long-term strategy and initiatives.
“Our guidance ranges for both Q1 and the full-year 2021 [upwards of 2%] reflect our best estimates of the impacts at this time,” Bilunas said.
Separately, the nation’s largest CE retailer disclosed that fourth-quarter (ended Feb. 1) same-store entertainment sales in the United States fell nearly 22% to $1.1 billion compared to a 2.7% increase to $1.3 billion in the previous-year period.
The entertainment segment includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.
The nation’s largest consumer electronics retailer said entertainment represented 8% of $13.8 billion domestic revenue, down from 10% of $13.5 billion in Q4 of 2019.
Internationally, same-store entertainment sales dropped nearly 17% to $94 million from a 2.7% drop to $117 million during the previous-year period. Entertainment represented 7% of international revenue compared to 9% in 2019.
Overall, domestic revenue increased 2.6% versus last year. The increase was driven by comparable sales growth of 3.4%, partially offset by the loss of revenue from store closures in the past year.
The largest comparable sales growth drivers were headphones, computing, appliances, mobile phones and tablets. These drivers were partially offset by declines in the gaming category.
Domestic online revenue of $3.52 billion increased 18.7% on a comparable basis due to higher average order values, increased traffic and higher conversion rates. As a percentage of total domestic revenue, online revenue increased to 25.4% versus 21.9% last year.