Best Buy (BBY) exceeded analysts’ revenue expectations for the third straight quarter in the fiscal second quarter of 2019. The consumer electronics retailer reported revenue of $9.38 billion in the quarter, which ended on August 4. Analysts had expected it to post revenue of $9.28 billion.
The company’s revenue rose 4.9% on a year-over-year basis in the fiscal second quarter of 2019.
What drove Best Buy’s fiscal second-quarter revenue?
Best Buy’s revenue growth in the fiscal second quarter of 2019 was driven by same-store sales growth of 6.2%. The company’s same-store sales benefited by 150 basis points due to the calendar shift in the fiscal year. The merchandise categories that performed well in the quarter included home theater, gaming, health and wearables, and mobile phones.
Best Buy’s Domestic segment revenue grew 4.4% to $8.6 billion in the fiscal second quarter of 2019. The rise in the segment’s revenue was driven by same-store sales growth of 6.0%, which was partially offset by the impact of the closures of 292 Best Buy Mobile and 17 Best Buy large-format stores.
The Domestic segment’s online revenue of $1.21 billion rose 10.1% on a comparable basis and accounted for 14% of the segment’s revenue compared to 13.2% in the fiscal second quarter of 2018. Online revenue growth was driven by higher traffic and increased conversion rates.
However, the company’s online revenue growth rate in the fiscal second quarter of 2019 slowed compared to the 31.2% growth it saw in the fiscal second quarter of 2018. The company indicated during its earnings conference call that the consumer electronics category was a mature one when it came to the online channel, so a slowdown made sense.
Best Buy’s International segment’s revenue rose 10.8% to $740 million driven by same-store sales growth of 7.6%. Additional revenue from six new large-format store openings in Mexico and favorable foreign currency movements also boosted the segment’s revenue.
Fiscal 2019 revenue outlook
Best Buy now expects its fiscal 2019 revenue to be in the range of $42.3 billion–$42.7 billion compared to its previous guidance of $41.0 billion–$42.0 billion. The company expects its fiscal 2019 same-store sales growth to be in the 3.5%–4.5% range compared to its previous guidance of 0.0%–2.0% growth.