Santa came early to Best Buy, which just released unexpectedly good sales and profits as it continues to roll out its “Holiday Gifting Made Easy” campaign for stressed-out shoppers.
For its fiscal third quarter, the Minneapolis-based retailer says revenue climbed to $8.95 billion from $8.82 billion in the comparable period a year ago, with same-store sales advancing 1.8%, while online sales surged 24%.
Management credits the stronger results to continued product innovation, improved digital capabilities and sharper marketing. “As our marketing tagline, Holiday Gifting Made Easy, states, our goal is to make holiday shopping effortless for customers,” CEO Hubert Joly says in its announcement.
“To win holiday and deliver on this promise, we have created an exciting assortment of great and competitively priced products, and we have mobilized our assets, including our leading-edge digital capabilities, fast and free shipping across the entire site during holiday, and of course our knowledgeable Blue Shirts and Geek Squad agents who are here to provide compelling in-store experiences and in-home services.”
And while product recalls are having an impact on results, the company says home theater, mobile phones, wearables and connected home devices are selling well, offset by declines in gaming.
While the gains may not seem all that impressive, Håkon Helgesen, an analyst at Conlumino, the retail consultancy, writes that it’s an indication that Best Buy is outselling the competition.
“Admittedly the revenue increases may look anemic, with growth remaining well below the 2% level across all lines,” he writes. “However, in the context of a fairly weak electricals market and intense competition from online players, we believe that the results are respectable and show that Best Buy is finally getting its house in order.” And while some of the gains are due to new releases, notably the iPhone 7, “Best Buy also deserves credit for a market beating performance in consumer electronics -- helped by wearables and smart home products -- and a solid sales uplift in appliances.”
And while he is encouraged by its gift lineup for the weeks ahead, especially wearables, he is also concerned about indications that consumers may shy away from electronic gifts this year.
Best Buy hopes to overcome that by focusing its holiday marketing on just how easy gift-buying can be this year. Fifteen comical ads from Grey New York feature ways Best Buy’s blue-shirted assistants simplify gift-shopping, including a Hoagy Carmichael-esque turkey that bastes itself, a tough-guy poinsettia that slaps your kids into line, and a genuine ginger (better known as chef Bobby Flay) to make your gingerbread.