Best Buy reported $14.8 billion in revenue for the fourth quarter of 2019, down from $15.4 billion for the same period in fiscal year 2018, but above consensus analyst estimates of $14.7 billion, according to the company’s earnings press release.
The retailer also posted a 3% year-over-year increase in comparable sales for the quarter, which totaled $13.5 billion, and contributed to a 4.8% increase in comp sales for the full year, Best Buy CEO Hubert Joly said in the release.
Net income for the quarter was $735 million, more than double the $364 million in net income reported for the fourth quarter of fiscal year 2018, while domestic online revenue came in at $2.9 billion for the quarter, up 9.3% on a comparable basis, the release stated.
Best Buy’s stock price was up 16% at the time of publication Wednesday morning — a victory for a retailer that soundly beat estimates. The comparable store sales growth came from multiple segments, including wearables, appliances, smart home and gaming. Notably, mobile phone sales declined, partially offsetting growth elsewhere. That decline isn’t surprising, however, given recent softer demand noted by the likes of Apple and Samsung. Earlier this month, Best Buy offered big discounts on many Apple products, including iPhones.
Even the overall decline in revenue for the retailer last quarter should be viewed with the understanding that the recent fourth quarter was a week shorter than the previous year; Best Buy said those extra days in fiscal Q4 2018 produced $715 million in revenue. The 3% comp rise didn't factor in the lost week, according to the release.
The retailer clicked in multiple channels in its most recent quarter, with online revenue now accounting for 21.9% of all domestic revenue, having risen on increased traffic and conversion rates. International comparable sales also rose 2.5%. International revenue decreased 5.2% versus year-over-year to $1.30 billion, but that figure again should be viewed in light of the shorter Q4 in fiscal year 2019.
“Best Buy continues to generate increasing traction in its multi-channel quest, with both brick-and-mortar and online posting impressive performance for both Q4 and FYE 2018,” stated Charlie O’Shea, Moody’s lead Best Buy analyst, in an email to Retail Dive. He added that the online growth also “needs to be viewed in the context of an over $8 billion online base in a highly-penetrated sub-segment of retail as well as the strong physical store performance, with operating margin of 6.6% reflecting meaningful year-over-year improvement.”
Best Buy provided outlooks for the first quarter of fiscal year 2020 and the full year, saying that it expects Q1 revenue of between $9.05 billion and $9.15 billion, and comparable sales growth flat to an increase of 1%. For the full year, revenue is anticipated to come in between $42.9 billion and $43.9 billion, with comparable sales growth of 0.5% to 2.5%.