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.

Walmart Reports Record Q4, Fiscal Year Revenue; E-Commerce Skyrockets

Walmart Feb. 18 reported record revenue of $152.1 billion for the fourth quarter (ended Jan. 31). That was up 7.3%, or $10.4 billion, from the previous-year period. Same-store sales increased 8.6%. For the fiscal year, revenue increased 6.7% to $559.2 billion, an increase of $35.2 billion. Online sales exploded 69% in the quarter and 79% for the fiscal year.

The world’s largest retailer saw strong sales performance in categories related to customer comfort, leisure and recreation, including home, consumer electronics, sporting goods, toys, and outdoor living. Walmart attributed the surge in part to federal government-driven COVID-19 stimulus spending, which benefited January sales.

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“Our associates responded unbelievably to serve customers in one of the most challenging times we’ve faced,” CFO Brett Biggs said in a statement. “We accomplished this while accelerating our long-term strategy of transforming Walmart into a dynamic omnichannel business. It’s now time to accelerate even more.”

CEO Doug McMillon said some of that acceleration includes raising average wages toward $15 per hour for an additional 425,000 frontline workers after raising wages for 165,000 associates last fall. The chain is set to raise some position’s hourly wage to $13 to $19 on March 13. Walmart’s current average minimum wage remains at $11 hourly, while rivals Amazon and Target increased their starting hourly wage to $15.

Walmart, the country’s largest private employer with around 1.5 million personnel, has been long criticized for not raising its minimum wage for store workers. Three years ago the chain reacted, upping its hourly starting pay to $11 from from the federal minimum of $7.25.

Increased employee costs and cautious 2021 projections resulted in a pre-market stock value decline, which then bumped up slightly in early trading.

“We completed a strong year and a strong Q4 thanks to our amazing associates,” McMillon said. “They stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic.”

Last September Walmart launched “Walmart Plus,” a $98 annual subscription program aimed at competing with the Amazon Prime membership. Unlike Prime, Walmart’s membership service does not include streaming video after the chain sold its Vudu subsidiary.

“This is a time to be even more aggressive because of the opportunity we see in front of us,” McMillon said. “The strategy, team and capabilities are in place. We have momentum with customers, and our financial position is strong.”

Netflix Tops Q4 Sub Growth Forecast, Ended 2020 with 203 Million Subs

Netflix ended 2020 pretty much the way it started the record year: with a bang. The SVOD pioneer Jan. 19 reported fourth-quarter subscriber growth of more than 8.5 million, up 42% from a projected 6 million new subs. Netflix ended the year with more than 203 million global subs — 2 million more than projected.

Netflix added 860,000 subs in North America to end the year with almost 74 million in the region — compared with 67 million at the end of 2019. The service added 4.5 million subs in Europe/Middle East to reach 67 million, compared with 52 million in 2019. Latin America added 1.2 million subs to end 2020 with more than  37 million. Asia Pacific added 2 million subs to end the year with more than 25 million, compared with 16 million a year ago.

For the full year, the streamer added a record 37 million paid memberships, achieved $25 billion in annual revenue (up 24% year-over-year) and grew operating profit 76% to $4.6 billion.

“We’re becoming an increasingly global service with 83% of our paid net adds in 2020 coming outside the [North American] region,” Co-CEO’s Reed Hastings and Ted Sarandos wrote in a letter to shareholders.

The executives said Europe and the Middle East region accounted for 41% of full-year paid net adds, while Asia Pacific region was the second-largest contributor to paid net additions with 9.3 million (up 65% year over year).

Netflix said George Clooney’s sci-fi drama The Midnight Sky was the most-streamed original movie in the quarter, reaching an estimated 72 million homes since its Dec. 25 launch. The streamer said animated feature Over the Moon was streamed by 43 million homes, while We Can Be Heroes was streamed by 53 million households.

Over the winter holidays, subscribers increasingly streamed Holidate with Emma Roberts, and The Christmas Chronicles 2, with Kurt Russell reprising his Santa role. The movies were streamed by 68 million and 61 million households, respectively. Netflix counts a viewer after two minutes of streaming.

Indeed, Netflix said chess-themed original limited series “The Queen’s Gambit” was streamed by 62 million homes — the biggest limited series debut in the streamer’s history. Netflix said its original series accounted for 90% of the most-searched shows globally in 2020, with original movies representing another 20%.

“In addition to titles with big viewership, we also aspire to have hits that become part of the cultural zeitgeist,” Hastings and Sarandos wrote.