Best Buy (NYSE:BBY) reported a better-than-expected second quarter, with $8.9 billion in sales. The sales increase has been attributed to the Renew Blue cost reduction initiatives and online sales, and the company hopes that innovators in the electronics industry will speed up the release of new products to help drive profits.
The retailer continues to see a shift in consumer behavior as more shoppers purchase online.
"As a result, traffic to our brick-and-mortar stores continued to decline, yet our in-store conversion and online traffic continued to increase due to the execution of our Renew Blue strategy, which is in direct alignment with this shift," said Hubert Joly, president and CEO of Best Buy.
The Renew Blue strategy is designed to grow business, enhance the in-store customer experience, and leverage omnichannel capabilities.
Best Buy's Renew Blue is part of Joly's turnaround program. It has cut operational costs by approximately $765 million and clipped the workforce by roughly 2,000 employees.
"Looking ahead, our goal is to continue to create a differentiated multichannel customer experience, such that every interaction customers have with us, regardless of channel, makes them a promoter of the Best Buy brand," Joly said. "In support of this, we will be intensifying our investments in customer-facing initiatives across both channels in the back half of the year."
Sharon McCollam, Best Buy's executive VP, CAO and CFO, also commented on the quarterly sales, saying industry-wide numbers were continuing to decline in many of the electronics categories.
"We are also seeing ongoing softness in the mobile phone category ahead of highly anticipated new product launches," McCollam said. "Therefore, absent any change in these declining industry trends and with limited visibility to new product launch quantities, we continue to expect comparable sales to decline in the low-single digits in both the third and fourth quarters."
Domestic revenue declined 2.4 percent from last year to $7.59 billion, due in large part to less favorable economics and the new credit card agreement. However, online revenue increased 22 percent to $581 million with help from the national rollout of Best Buy's ship-from-store capability and a higher average order value.
Beyond the in-store pick-up capabilities, Best Buy has seen a boost in sales due to its partnership with Sony and Samsung to create store-in-store kiosks.
-See this Best Buy press release
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