Best Buy (BBY) Stock Up on Solid Q2-to-Date Online Sales

Shares of Best Buy Co., Inc. BBY increased roughly 5% during after-hours trading session on Jul 21, following an impressive second-quarter-to-date sales performance for fiscal 2021. Robust consumer demand has been the key sales driver. In addition, the consumer-electronics retailer said that it is increasing the starting hourly wage to $15 for its entire domestic staff effective Aug 2.

Coming to Best Buy’s sales numbers, the metric rose nearly 2.5% year over year for fiscal second quarter-to-date through Jul 18. This comprises sales growth of about 2% domestically and around 8% internationally. During aforementioned period, online sales leaped 255% with the computing, appliance and tablet categories being leading contributors. For the period beginning Jun 15, when the company started reopening stores, through Jul 18, sales jumped approximately 15%, with online sales surging 185% in comparison with the year-earlier period. Nearly all of Best Buy’s outlets were open as of Jun 22.

Another announcement made involves ongoing evolution of the pay structure, thus acknowledging employees’ efforts amid the pandemic. Management announced a 4%-raise in hourly rate, replacing the short-term incentive compensation for store employees below leadership level. Even after this increase, employees who will not receive the $15-minimum hourly wage will get their pay increased to $15.

Around 51,000 domestic hourly store employees, including almost all part-time staff, were temporarily furloughed on Apr 19. On Jun 15, the company started bringing back its furloughed staff, and about 50% of the same have returned. Notably, Best Buy has extended health benefits without any cost through Sep 5 for the rest of the furloughed employees enrolled in the company’s health plan.

We note that Best Buy’s quick shift to a contactless curbside service-only operating model amid the coronavirus crisis has worked wonders. Customer satisfaction scores for curbside pickup have been sturdy. The Zacks Rank #2 (Buy) company’s Building the New Blue initiative, which focuses on pursuing growth opportunities, better execution in key areas, cost containment and investing in people and systems, is also boding well alongside the Total Tech Support program and healthcare technology business.

Impressively, the Richfield, MN-based company’s shares have registered an increase of 18% over the past year, while its industry declined 2.8%.

More Key Picks in Retail

Dollar General DG has a long-term earnings growth rate of 12.3% and currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sprouts Farmers Market SFM, also a Zacks Rank #1 stock, boasts a long-term earnings growth rate of 9.2%.

Big Lots BIG has a long-term earnings growth rate of 7.1% and sports a Zacks Rank #1.

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