Videogame Consoles Hot in COVID-19, Smartphones Not, Best Buy Says; Stock Down
Videogame console sales were hot during the pandemic, smartphones less so, and it's hard to predict the COVID-19 future, Best Buy executives said Thursday. Revenue for fiscal Q1 ended May 2 fell 6.3% to $8.6 billion from the year-ago period…
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but gaming comparable sales jumped 9.5%. A falloff in mobile phone sales offset increases in computing sales, said Chief Financial Officer Matt Bilunas. Services revenue fell 16.1%. Strong game console results were a “bit of a surprise” because management expected the spike to hit in fall with new platform resets, said Chief Operating Officer Mike Mohan. He pegged the Q1 demand to stay-at-home trends. The company furloughed workers and shut stores (see 2004290032). There’s “still a high level of uncertainty” at micro and macro levels, said CEO Corie Barry. It's “scenario-planning” about variables including unemployment; varying and changing state restrictions on how consumers engage with local businesses; and customer and employee safety via social distancing and masks. The measures will continue into the foreseeable future, she said. During the six weeks when the retailer moved to curbside-only sales, domestic online sales surged 300% year on year, she said, with half using curbside pickup. The pandemic strengthened Best Buy’s resolve that technology should be playing a bigger role in consumer healthcare, said Mohan. Now, consumers are thinking more about what they could or should be doing at home health-wise, he said. It’s a small business for the company, though it has had increased demand for thermometers and other “smart” health gear. Barry sees the home office buildout trend continuing. Shares closed down 4.37% at $77.98.