Best Buy Q2 Entertainment Revenue Soars 36%

Best Buy Aug. 24 reported a 36.4% increase in entertainment segment revenue for the second quarter, ended July 31. The unit, which includes products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, generated revenue of $550 million, compared with revenue of $403 million in the prior-year period.

CEO Corie Barry attributed the increase to comparison with an “unusual quarter last year” as stores were limited to curbside service or in-store appointments for roughly half the quarter.

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“The [consumer] demand was bolstered by the overall strong consumer spending ability, aided by government stimulus, improving wages and high savings levels,” Barry said in a statement.

Based the double-digit same-store sales increases throughout the company, CFO Matt Bilunas said management was raising the fiscal outlook for the year.

“For the second half of FY22, we expect our comparable sales to be in the range of flat to down 3% versus last year, compared to our previous annual outlook that implied a high single-digit decline,” Bilunas said.

Study: One-Third of Consumers Believe Entertainment Habits Forever Changed by Pandemic

One-third of consumers believe entertainment habits will be forever changed by the pandemic, according to a new study.

The United Talent Agency study, “Forever Changed: Covid-19’s Lasting Impact on the Entertainment Industry,” also found 84% of consumers spent more time with entertainment during the pandemic with more than two-thirds (67%) saying they intend to spend more time with entertainment post COVID-19 than they did prior.

During the pandemic, seven in 10 became “Entertainment Explorers,” turning to new formats, platforms or genres, while half became “Fervent Fans,” more engaged with entertainment and strengthening their fandom.

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Compared to pre-pandemic behavior, one-third plan to subscribe to or use more entertainment platforms, a quarter plan to consume more genres/types of stories and a third plan to consume more international content or stories with diverse voices.

During the pandemic, a quarter started consuming an entertainment format that they didn’t prior and a third subscribed to or used more entertainment platforms than they would have otherwise.

Post-COVID, 71% said they plan to use multiple SVOD platforms, compared with 70% during the pandemic. More than half (56%) added at least one SVOD platform during the pandemic.

Among subscriptions started during the pandemic, Apple TV+ was the leader (48%) with Netflix (46%), Disney+ (46%), Hulu (39%) and Amazon Prime (34%) following, respectively. Among subscriptions used during the pandemic, Netflix led at 72% followed by Amazon Prime (54%), Disney+ (51%), Hulu (47%), HBO Max (36%), Apple TV+ (30%), Discovery+ (23%), Peacock (17%) and Paramount+ (12%), respectively.

The UTA-fielded study polled 1,000 U.S. consumers ages 18-54 in partnership with automated research company SightX.

Best Buy Q4 Entertainment Revenue Jumps 31.4%

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.

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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.

Best Buy Q3 Entertainment Revenue Up 17.5%

Best Buy Nov. 24 reported strong third-quarter (ended Oct. 31) sales, driven in part by a near 174% increase in e-commerce revenue and entertainment.

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 17.5% compared with a 20.8% decline during the previous-year period. The division generated 5% of domestic revenue, or $542.5 million, compared with $448.2 million last year.

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Internationally, entertainment sales skyrocketed 35.6% to $50 million, compared to a 31.1% drop at $40 million last year.

“Our comparable sales grew a remarkable 23% as we leveraged our unique capabilities, including our supply chain expertise, flexible store operating model and ability to shift quickly to digital, to meet what is clearly elevated demand for products that help customers work, learn, cook, entertain and connect in their homes,” CEO Corie Barry said in a statement.

Barry said the pandemic environment has underscored Best Buy’s purpose to “enrich lives through technology,” and the capabilities the consumer electronics chain is “flexing and strengthening” now would benefit it going forward.

One strategy is e-commerce, which saw revenue explode 173.7% to $3.82 billion, from $1.39 billion last year.

 

Best Buy Narrows Q2 Entertainment Sales Decline

Best Buy Aug. 25 reported a 4.4% drop in second-quarter (ended Aug. 1) domestic same-store entertainment revenue, which was an improvement from a decline of 13.7% in the previous-year period.

The entertainment segment, which includes myriad products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, generated 5% of domestic revenue, or $456 million. The segment generated 5% ($441 million) in the previous-year period.

Internationally, same-store entertainment sales ballooned 44.5%, compared with a 20.1% decline in the previous-year period. The segment generated $13 million in sales compared to $14.3 million in the period a year ago.

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Notably, the nation’s largest consumer electronics brick-and-mortar retailer saw domestic CE sales drop 3.8% compared to a 1% increase a year ago. CE represented 29%, or $2.65 billion, of domestic revenue, compared with 32%, or $2.82 billion in the previous-year period.

Outside the U.S., consumer electronics same-store sales dropped 4.7%, compared with a gain of 1% last year. CE revenue represented 27%, or $211.4 million of sales, down from 32%, or $229 million, a year ago.

As expected, online sales skyrocketed 242% to $4.85 billion on a comparable basis primarily due to increased traffic. As a percentage of total domestic revenue, online revenue increased to about 53.1% versus 16.1% last year.

The company plans increase shipments of online orders from local stores, with about 250 locations positioned to ship out higher volumes of product.

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“Clearly, we are still operating in a dynamic environment [due to the coronavirus pandemic], and much uncertainty remains,” CEO Corie Barry said in a statement.

Barry said trends across most categories and services improved materially throughout the quarter as Best Buy re-opened more stores.

“The pandemic has accelerated the evolution of retail and compelled us to change our operating model in the best interest of our customers and employees,” Barry said. “It has allowed us to expedite some planned strategic changes that will set us up to emerge from this time even stronger.”

Indeed, domestic revenue of $9.13 billion increased 3.5%, versus $8.8 billion last year. The increase was primarily driven by comparable sales growth of 5% (1.9% increase last year), which was partially offset by the loss of revenue from 25 permanent store closures in the past year.

The largest comparable sales growth drivers were computing, appliances and tablets. These growth drivers were partially offset by declines in mobile phones, digital imaging and services.

That said, CFO Matt Bilunas warned that current Q3 sales would 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.

That disclosure sent Best Buy shares down 4% in early morning trading.

Best Buy CFO: Coronavirus ‘Very Fluid Situation’ Impacting First Half-Year Results

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.

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“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.

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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.

Best Buy Q3 Entertainment Revenue Plummets

Best Buy can’t wait for the winter holiday retail season.

The nation’s largest consumer electronics retailer Nov. 26 said third-quarter (ended Nov. 2) domestic entertainment revenue dropped nearly 21% in same-store sales compared to a gain of 12.4% during the previous-year period. International entertainment sales fell 31% compared to a gain of 10.8% last year.

The entertainment segment includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.

Entertainment represented 5%, or $448 million of domestic revenue, compared to 6%, or $525 million during the previous-year period.

International revenue represented 5%, or $40 million of same-store sales, compared to 7%, or $58.3 million last year.

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Domestic revenue increased to $8.96 billion, up 2.4%versus last year. The increase was driven by comparable sales growth of 2% and revenue from GreatCall, which was acquired in Q3 last year, partially offset by the loss of revenue from store closures in the past year.

The largest comparable sales growth drivers were appliances, headphones, tablets, services and computing. These drivers were partially offset by declines in the gaming and home theater categories.

“We are excited about our holiday plans,” CEO Corie Barry said in a statement. “Customers ordering online will get free next-day delivery on thousands of items all season long with no membership or minimum purchase required. They can also choose to pick up their products in a store within an hour of placing their order.”

Indeed, domestic online revenue increased 15% to $1.4 billion due to higher average order values. As a percentage of total domestic revenue, online revenue increased 15.6% versus 13.8% last year.

As the holidays loom, Best Buy is offering free next-day delivery on myriad items, excluding bigger and heavier items such as big-screen TVs and refrigerators.

With the service “Store Pickup,” customers can get their order ready within an hour at their local Best Buy. Best Buy reports 40% of online sales are picked up in stores.

Best Buy Widens Q1 Entertainment Sales Decline

Christmas is officially over. The post-winter holiday blues hit Best Buy entertainment sales with a thud.

The nation’s largest consumer electronics retail chain May 23 reported a 12.7% drop in same-store entertainment sales to $424 million for the quarter ended May 4. The business unit includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.

Entertainment sales declined less than 1% to $504 million in the previous-year period.

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International entertainment sales dropped 14% to $33 million, compared to an 8.3% decline to $41.8 million in the previous-year period.

Overall, Best Buy upped domestic operating income 24.3% to $332 million from $267 million last year. Revenue upped less than 1% to $8.48 billion from $841 billion.

The largest comparable sales growth drivers were appliances, wearables and tablets.

Domestic ecommerce revenue of $1.31 billion increased 14.5% on a comparable basis primarily due to higher average order values and increased traffic. As a percentage of total domestic revenue, online revenue increased to 15.4% versus an increase to 13.6% last year.

On June 11, CEO Hubert Joly transitions to the newly created position of executive chairman. CFO and strategic transformation officer Corie Barry becomes Best Buy’s fifth CEO and first female chief executive.

Joly appears to relish the transition from day-to-day operations to cushy board oversight.

“I am very proud of the seamless transition we have decided to implement, as it reflects positively on our momentum as well as our focus on executive development and succession planning,” Joly said in a statement.

Best Buy Q4 Entertainment Sales Growth Cools, Profit Up

Best Buy Feb. 27 reported a 2.7% increase in fourth quarter (ended Feb. 2) entertainment comparable store sales, which was down from a 16.8% increase during the previous-year period.

The entertainment segment, which includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, generated 10% ($1.34 billion) of Best Buy’s $13.4 billion in domestic revenue. That compared to $1.39 billion (10%) during the previous-year period.

Internationally, same-store entertainment sales dropped 2.5% compared to a 11% increase last year. Entertainment represented 9% ($117 million) of international revenue, compared to $123 million (9%) last year.

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Overall, the nation’s largest consumer electronics retailer reported $735 million in profit, which was up from $364 million in net income during the previous-year period. Revenue dipped less than 4% to $14.8 billion compared to $15.3 billion last year.

The company generated comparable sales growth across multiple categories, with the largest drivers being wearables, appliances, smart home and gaming. These drivers were partially offset by a decline in the mobile phone category.

Indeed, Best Buy closed 257 branded mobile and 12 large format stores in 2018.

“We are very proud of the financial results we have just delivered,” CEO Hubert Joly said in a statement. “For the fourth quarter, we reported a 3% increase in our comparable sales, on top of 9% comparable sales growth last year. For the full year, our comparable sales grew 4.8% and our [earnings per share] increased more than 20%.”

 

Best Buy Reports Softer Q2 Entertainment Sales Increase

Best Buy Aug. 28 reported 8.5% same-store entertainment sales increase in second quarter (ended Aug. 4) – down from 15.4% sales increase in the previous-year period.

The entertainment segment, which includes myriad products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, generated 7% ($604.7 million) of Best Buy’s domestic revenue in the quarter compared to 6% ($1.27 billion) last year.

Internationally, entertainment same-store sales increased 14.3%, generating $44.4 million (6%) of revenue. That compared to 0.5% increase and revenue of $33.4 million (5%) last year.

Best Buy’s legacy CE unit saw 6.8% increase in domestic same-store sales, up from 2.5% increase last year. Revenue remained relatively flat at $2.76 billion compared to $2.64 billion last year.

“Our comparable sales growth was helped by the favorable environment in which we operate and driven by how customers are responding to the unique and elevated experience we are building,” CEO Hubert Joly said in a statement. “We are particularly encouraged with the continued progress of our … continued market share gains. We are excited about the progress we are making on the implementation of our Best Buy 2020 strategy and the opportunities in front of us.”