Best Buy Co., Inc. is an American multinational consumer electronics store. It was originally formed in 1966 as an audio specialty store called Sound of Music, but in 1983 it was relaunched as it is now, focusing on consumer electronics.
With over 1,000 locations and nearly 100,000 employees in the United States and Canada, Best Buy is the top distributor of consumer technology products and services in North America.
Yahoo Finance previously named Best Buy the largest specialized retailer in the United States consumer electronics retail market. The company was placed 72 on the Fortune 500 list of the largest corporations in the United States by total revenue in 2018.
How Best Buy Performed During COVID-19 in 2020
Best Buy was one of the retail champions of the Covid-19 pandemic, with full-year sales of $47.2 billion in the fiscal year, up from $43.6 billion the previous year. During the early months of the Covid-19 outbreak, businesses were ordered closed. However, Best Buy was allowed to remain open because of its “essential business” status.
However, to protect staff, Corie Barry, Best Buy’s CEO, ordered the chain’s doors to be closed and switched to an online and curbside-only operation for weeks, a move she described as a “life and death” decision. Customers required equipment to equip home offices or electronic toys to survive being cooped up at home, so Best Buy sales soared.
Best Buy announced that its US internet sales (increased purchasing of printers, computers, fitness tech, tablets, and other gear) for the second quarter of 2020 tripled due to the COVID-19 pandemic’s lockdown and increased working frequency from home. Despite these alleged gains, Best Buy lay off roughly 5,000 employees in early 2021, forcing many others to work part-time.
Best Buy also intends to leverage more of its in-store space to fulfill orders for home delivery. The company is testing new shop layouts to reduce sales floors while increasing the area dedicated to shipping orders.
Best Buy Ranked First Among Big-Box Retailers for COVID-19 Safety
Best Buy was named the top big-box retailer in a countrywide assessment of brands’ safety responses to the COVID-19 outbreak. They also won Best Overall Brand alongside three other companies for their end-to-end client journey, distinguishing them from the other 24 competitors.
The Consumer Health & Safety Index was created by Ipsos, a major market research business, using data from shoppers at 3,500 different sites and a survey of 2,000 people. It examined the health and safety aspects customers value the most and how brands are doing compared to consumer expectations.
About the study:
Ipsos shoppers evaluated the compliance of over 25 brands with key health and safety features. During this investigation, a random sample of 75 to 125 stores per brand was audited. The study took into account geographic representation and a margin of error of 5% to 7%.
Environmental Sustainability
Best Buy is one of the most sustainable companies in the United States. Having already reduced carbon emissions by 55% since 2009, they pledge to be carbon neutral by 2040.
In the company’s latest environmental, social, and governance (ESG) report (the fiscal year 2021), they stated the following:
- After achieving their objective of reducing carbon emissions in their operations by 60%, they set a new goal of reducing carbon emissions by 75% by 2030. (over a 2009 baseline). This target is in line with the Science-Based Targets initiative (SBTi), which means their decrease is per the reduction required to keep global temperature rise below 2°C, as indicated in the Intergovernmental Panel on Climate Change’s Fifth Assessment Report (IPCC).
- Their operational carbon reduction is 61% by the end of 2020. Many projects, including increased investments in LED lighting, are being spread across their stores to help with the decrease. The grid is becoming cleaner as well, something they actively promote with investor-owned utilities and policymakers.
- CDP, the world’s leading authority on climate change, has appointed Best Buy to its renowned Climate A List for the fifth year in a row. Best Buy’s efforts to reduce emissions, alleviate climate risks, and develop a low-carbon economy are recognized on the list. This puts them in the top 5% of all companies involved in the CDP’s climate change initiative.
- Renewable Energy Credits (RECs), which incentivize renewable energy development, are still being purchased by Best Buy. They were ranked No. 5 on the Green Power Partnership retail list by the US Environmental Protection Agency in January 2021.
- In 2020, the company utilized little under 1 million cubic meters of water in its United States and Canada operations. This is a 31% decrease over the previous year.
Best Buy’s Commitment to Increase BIPOC Representation
Best Buy promised last year that they would “do better,” and they are finally following through on that promise. Brown Venture Group, a venture capital firm specializing in Black, Latinx, and Indigenous technology entrepreneurs in emerging technologies, is investing up to $10 million with Best Buy.
The purpose of this investment is to assist in breaking down systemic barriers that Black, Indigenous, and People of Color (BIPOC) entrepreneurs experience, such as a lack of finance, and to encourage the next generation of software entrepreneurs.
Brown Venture Group is trying to support tech startups around the country, and it expects to be one of the major funds in the nation with a diversity mandate. This fall, investments will commence.
Best Buy CEO, Corie Barry, said, “We’re committed to taking meaningful action to address the challenges faced by BIPOC entrepreneurs. Through partnerships like this, we believe we can begin to do this by helping to build a stronger, more vibrant community of diverse innovators in the tech industry, some of whom we hope will become partners of Best Buy in the future.”
Best Buy CEO Corie Barry
Only a few women lead Fortune 500 corporations, and CEO Corie Barry is one of them. She’s also one of the youngest CEOs of an S&P 500 company at 46.
Best Buy is on track to become one of the best places to work in America under Corie’s leadership, with a goal of doubling important customer relationship events to 50 million and increasing annual revenue to $50 billion by fiscal 2025.
Corie had many senior positions before becoming CEO in June 2019, including a vital role in developing and executing the company’s Building the New Blue growth plan and related transformation. She was the company’s chief financial and strategic transformation officer, most recently, in charge of strategic change and growth, digital and technology, global finance, investor relations, enterprise risk and compliance, integration management, and Best Buy Health.
In an interview with CNBC, she said, “My career path is anything but linear. I spent time in finance. I spent time actually living and working in the field in retail. I spent time running services. I started our strategic growth office. I’ve had the chance to run our technology teams.”
Best Buy (NYSE: BBY) Stock and Dividend News
As of August 25, 2021, Best Buy Co., Inc.’s stock is trading at $121.64.
Best Buy has been paying dividends for the last 18 consecutive years and currently has a dividend yield of 2.55%, with a growth rate of 19.64% over five years. Dividends are paid quarterly.
Financial Report Highlights – Second Quarter Financial Year 2022
Best Buy Co., Inc. reported second-quarter results for the 13 weeks ending July 31, 2021 (Q2 FY22), compared to the 13 weeks ending August 1, 2020 (Q2 FY21). Here are some of the highlights from the report:
- Domestic revenue was $11.01 billion, up 20.6% from the previous year. The increase was driven mainly by a 20.8% increase in comparable sales.
- Domestic gross profit margins were 23.7%, up from 22.8% the previous year.
- GAAP Diluted Earnings Per Share (EPS) rose 76% to $2.90.
- GAAP and Non-GAAP Diluted EPS both increased by about 47%.
- International revenue of $838 million was up 7.2% from the prior year. This improvement was driven by a 1,070 basis point gain in favorable foreign currency exchange rates, as well as a 5.0% increase in comparable sales.
- The company returned a total of $571 million to shareholders in Q2 FY22, with $396 million in share repurchases and $175 million in dividends. They returned a total of $1.7 billion to shareholders this year through $1.3 billion in share repurchases and $350 million in dividends.
Best Buy’s Forecast for Fiscal Year 2022
- $51.0 billion to $52.0 billion in total revenue
- Enterprise comparable sales growth of 9% to 11%, up from the previous forecast of 3% to 6% growth
- Enterprise non-GAAP gross profit rate somewhat higher than last year, compared to the earlier estimate of about flat last year
- Enterprise non-GAAP gross profit rate somewhat higher than last year, compared to the earlier estimate of about flat last year
- Approximately 20% non-GAAP effective income tax rate
- More than $2.5 billion in share repurchases, compared to an earlier forecast of $2.5 billion