uploads///Quarterly Revenues

Best Buy’s Fiscal 2015 Revenue – Boosted by TVs and Mobile Phones

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Apr. 13 2015, Published 11:34 a.m. ET

Revenue sources

In fiscal 2015—ending January 31, 2015—Best Buy (BBY) derived ~47% of its US revenue from computing devices and mobile phones. Sales of consumer electronics, like televisions, contributed ~31% of its domestic revenue. Entertainment products, like video gaming hardware, accounted for ~9% of the US revenue. Appliances, services, and other products together accounted for the remaining 13%.

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Revenue rose in 4Q15

Best Buy’s 4Q15 revenue increased by 1.3% to $14.2 billion. It was driven by higher sales of televisions and mobile phones. It was partially offset by weak demand for tablets. The fourth quarter revenue fell short of analysts’ expectation of $14.3 billion. Best Buy missed analysts’ revenue expectations for all four quarters in fiscal 2015.

Fiscal 2015 revenue

For the full year, Best Buy’s revenue declined by 0.7% to $40.3 billion—due to currency headwinds. The company’s domestic revenue increased by 0.6% to $36.1 billion. Its international segment’s revenue was down by 10.4% to $4.3 billion. It was due to currency fluctuations, declining same-store sales, and store closures in Canada.

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Online revenue

In fiscal 2015, Best Buy’s online revenue in the domestic segment increased to $3.5 billion, or 9.8% as a percentage of segment sales—compared to 8.5% last year. The growth in the domestic segment’s online revenue was driven by improved inventory availability—due to the company’s ship-from-store facility and marketing efforts. Best Buy plans to further enhance its online shopping experience by expanding its product assortment and technological enhancements. It will target more sales by introducing programs for life events—like the Best Buy wedding registry.

Competitors’ revenue

Target (TGT) derives about 18% of its revenue from the hardlines category—including consumer electronics. It reported a 1.9% rise in its revenue to $72.6 billion for fiscal 2015. Amazon (AMZN) is a leading online retailer. Its revenue surged by 19.5% to ~$88.9 billion. Gamestop’s (GME) revenue for fiscal 2015 rose 2.8% to $9.3 billion—driven by new video game console launches and video game accessories. Target, Amazon, and Gamestop together account for ~3% of the SPDR S&P Retail ETF (XRT).

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