Best Buy Conference Phone

Thank you and good morning, everyone. Joining me on the call today are Corie Barry, our CEO, and Matt Bilunas, our CFO. During the call today, we will be discussing both GAAP and non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, and an explanation of why these non-GAAP financial measures are useful, can be found in this morning's earnings release, which is available on our website investors.bestbuy.com.

best buy conference phone

For the first nine months of the year, our online sales as a percentage of domestic revenue were 31%, nearly twice as high as pre-pandemic. We expect that penetration rate to begin to increase again over time as it did pre-pandemic. Additionally, customer demand for other virtual interactions has remained elevated, and we have seen strong and sustained sales growth from our investments in chat, phone, and video sales experiences this year. Of course, that also means that almost 70% of customers are shopping in our stores, and customers representing 42% of our online sales pick up their products at our stores.

The remodels also include premium home theater and premium appliances, more space for consultations and services, and expanded fulfillment capabilities like larger warehouses in-store and curbside pickup, and 24/7 lockers. Additionally, as you would expect, they all include the very best, most up-to-date vendor experiences, showcasing premium merchandising and specialized labor. While market conditions have created a tough environment for delivering remodels, our incredible and dedicated team was able to deliver 42 of them by Black Friday. We plan to provide a broader update on our store portfolio refresh strategy at year-end.

Importantly, if a customer isn't ready to buy in the moment, associates can send the product recommendations and a recap of the conversation to the customer via email, text or QR code so they can purchase later at their convenience. It is early, but we are very encouraged by the ramping employee adoption of the app and the higher revenue per transaction we are seeing when associates leverage Solution Sidekick. We are also leveraging our investment in electronic sign labels to provide a better and more efficient experience for customers who want to buy a product that is locked up or not readily available on the shelf. We've added new functionality that allows the customer to scan the QR code with their phone's camera and push a button, notifying they are ready to purchase.

Next, I will walk through the details of our third-quarter results compared to last year before providing insights into how we were thinking about the fourth quarter. In our domestic segment, revenue decreased 10.8% to $9.8 billion, driven by comparable sales decline of 10.5%. From a monthly phasing standpoint, October's year-over-year comparable sales decline of 15% was the largest decline, while September was our best-performing month. Conversely, when comparing to the pre-pandemic fiscal '20 comparable period, October had the most growth.

Think about like headphones and wearables and then, you can imagine, anywhere where the supply is really ample. We're also seeing some of that promotional activity in those spaces. And I think back to the question on the Q4 guide and how we're thinking about it, I think that's part of what we see in the background and part of what we're trying to take into account as we look at a competitive environment going forward.

I mentioned gaming consoles. That's commonly a place. And I think there has been some conversation about some of the more iconic phones and the production there and availability there. So, that's not anything that's new.

I'll start a bit and then Matt can add in. What -- what -- I actually believe that this combination of omnichannel is our strength. And not only are we agnostic, we love it when customers are using the multitude of channels that we have. And that includes consultations at home, that includes our virtual channels like chat and phone, that includes online, and that includes stores.

Yeah, we haven't really given the quantity of stores yet that we want to do into next year. And we actually mentioned that in the prepared remarks we're planning to give an update as we head into next year on our kind of experience refresh plan. I think it's important to note that everything that we're doing, we're trying to root in this really incredibly elevated shopping experience with this broader assortment, expanded fulfillment, best vendor experiences. And while we haven't given specific numbers, we have said we continue to see really good and improved sales results out of at least the two that have been open more than two years now, and NPS results consistently higher in those as well.

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Best Buy is scheduled to conduct an earnings conference call at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) on May 24, 2022. A webcast of the call is expected to be available at www.investors.bestbuy.com, both live and after the call.

Its pandemic-era momentum has teed up challenging comparisons for the consumer electronics retailer, particularly as shoppers feel strained by bigger grocery bills and other higher expenses fueled by inflation. Best Buy also sells a lot of big-ticket items, such as laptops and smartphones, purchases that customers may not make as frequently or may postpone if they're stretched by other spending priorities.

Best Buy is making a play to revive its storefront portfolio to bring the company's margins back to pre-pandemic levels and "stay relevant in an increasingly digital age," Barry said in the Thursday conference call. The revamp will cost the company $200 million in capital expenditures, about a quarter of the company's projected $850 million capital expenditures for the 2024 fiscal year.

Best Buy last year spent $800 million to acquire Great Call, maker of the senior-friendly Jitterbug phones, and an operator of call centers that provide emergency alert services. In 2017, it introduced Assured Living, a service that lets adult children remotely monitor the safety and health of their parents. In May 2019, the retailer expanded its Great Call emergency monitoring and call center capabilities by acquiring another monitoring company, Critical Signal Technologies.

As we emerge from the pandemic, it is clear that our customer shopping behavior has changed. Our online sales as a percentage of Domestic revenue in Q2 was 31%, nearly twice as high as pre-pandemic. Virtual revenue via video, phone and chat is growing rapidly as well, as sales for the first six months of the year are already almost equal to the virtual revenue we generated for all of last year. While still small overall, sales in our virtual store are ramping quickly. And we recently expanded categories to include appliances and home theater. In addition, our high NPS in-home interactions continue to increase rapidly. In fact, in-home installations have seen double-digit growth versus the prior year in five of the last six quarters and year-to-date in-home sales consultations are up more than 30% over last year and pre-pandemic.

During the quarter, we opened 2 new outlet stores in Virginia and Phoenix and just opened a location in Chicago earlier this month, bringing us to 19 locations. We see twice the recovery rate of our COGS when we sell open box, clearance and end-of-life inventory at our outlets versus alternative channels. With assortment expanded to include major appliances, large TVs, computing, gaming and mobile phones, we believe now is an opportune time to appeal to our existing Best Buy customers as well as an increasingly deal-seeking consumer overall.

Best Buy's shares sank Thursday after the nation's largest consumer electronics chain reduced its sales outlook for the fourth-quarter as it reported weak holiday business in mobile phones and personal devices. googletag.cmd.push(function() googletag.display('div-gpt-ad-1449240174198-2'); ); The Minneapolis-based company said it now expects a larger drop in fourth-quarter revenue, though the company improved its outlook for operating income. Best Buy shares tumbled almost 12 percent in morning trading.

During an conference call with the media Thursday, Hubert Joly, Best Buy's chairman and CEO , said that he had expected that sales of mobile devices would be weak as fewer customers upgraded their devices because of a lack of new technology. But he said sales were softer than expected and the declines more than offset sales growth in home theater, major appliances and wearable tech items like smart watches. Excluding mobile phones, domestic revenue increased year over year.

Best Buy Europe, the electrical goods venture between Carphone Warehouse and U.S. group Best Buy, plans to double Carphone's existing retail earnings in five years, despite a tough consumer outlook. REUTERS/Paul Hackett

Best Buy is a consumer electronics retailer with operations in the U.S., Mexico, and Canada. At its brick-and-mortar locations and online, the company sells a wide variety of items, including mobile phones, digital cameras, video games, and music, as well as home appliances like washing machines and refrigerators. Best Buy also provides repair services for computers and other devices at its stores through its Geek Squad brand. The retailer was one of the few to thrive during the pandemic, reporting a 144% increase in U.S. online sales and an 8.3% rise in total sales in 2020 as Americans updated their home offices for a new regimen of remote work. 041b061a72