February 25, 2021
Driven by e-commerce and new video game consoles from Sony PlayStation and Microsoft Xbox, Best Buy Feb. 25 reported a 31.4% leap in fourth-quarter (ended Jan. 31) domestic entertainment sales, a major turnaround from a decline of 21.8% in the previous-year period. International entertainment revenue skyrocketed 59.5% compared to a 16.9% drop a year ago.
The entertainment segment, which includes products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, saw same-store sales increase 12.4% compared with a 3.4% increase during the previous-year period. Online sales grew almost 90% to a record $6.7 billion, and made up 43% of total $15.4 billion domestic sales.
Entertainment generated $1.38 billion (9%) of domestic revenue, compared to $1.1 billion (8%) during the previous-year period. The segment represented 10% ($153.7 million) of international revenue, compared with 7% ($94.3 million) a year ago.
“Our stores played a pivotal role in the fulfillment of these sales, as almost two-thirds of our online revenue was either picked up in store or curbside, shipped from a store or delivered by a store employee,” CEO Corie Barry said in a statement.
Barry said that over the next few weeks, all hourly U.S. employees would cash bonuses of $500 if full-time and $200 if part-time.
“We are encouraging all employees to get COVID vaccinations as they are available by providing them with paid time off when they receive the vaccine and providing them absence time to be used in the event they develop side effects that warrant their needing to stay home and rest after receiving the vaccination,” Barry said.
Notably, Wall Street sent Best Buy’s stock down more than 8% in pre-market trading, in response to soft guidance and missed winter holiday sales projections. Yet, one analyst contends the CE giant could see a $400 million revenue boost from the shuttering of Fry’s Electronics in California.
“While this is not a needle mover for Best Buy’s base of $47 billion in sales, we view it as emblematic of an increasingly attractive landscape for competitors with staying power,” Jonathan Matuszewski, analyst with Jeffries, wrote in a note.