Best Buy enterprise revenue reached $8.5 billion for the quarter ended April 29, up 1.6 percent from the year-ago quarter, said the company’s Thursday earnings release. Best Buy had growth in domestic and international segments on better-than-expected mobile sales and strong performance in gaming and overall sales trends. In the U.S., Q1 revenue was $7.9 billion vs. $7.8 billion, which CEO Hubert Joly attributed to arrival of delayed federal tax refund checks. For fiscal Q2, Chief Financial Officer Corie Barry guided 1.5-2.5 percent enterprise revenue growth in the range of $8.6 billion to $8.7 billion, continuing Q1 momentum, and projected full-year growth of 2.5 percent, accounting for a 53-week year vs. a 52-week FY 2017, with the extra week coming in the holiday quarter. The company's stock closed up 22 percent Thursday to $61.27.
The National Retail Federation said Wednesday retail spending on graduation gifts is on track to reach a record $5.6 billion this year, up from $5.4 billion last year. Thirty-six percent of consumers plan to buy gifts for graduates this year, up from 34 percent last year, it said. Cash tops the list of gifts, given by 53 percent of those surveyed, 33 percent will give gift cards, 16 percent will give apparel and 11 percent will purchase electronics, said NRF. The biggest spending is likely to come from parents ages 45-54 ($119.84 average) and grandparents 65 and older ($112.34 average), it said. The survey of 7,335 consumers was done May 2-9 and has a margin of error of plus or minus 1.2 percentage points.
Spending for Easter, April 16 this year, is projected to reach $18.4 billion, up from $17.3 billion in 2016, said a National Retail Federation report Thursday. Consumers celebrating Easter plan to spend an average of $152 per person, vs. last year’s $146 average. Projections include spending of $5.8 billion on food (87 percent of shoppers), $3.3 billion on clothing (50 percent), $2.9 billion on gifts (61 percent), $2.6 billion on candy (89 percent), $1.2 billion on flowers (39 percent), $1.1 billion on decorations (43 percent) and $788 million on greeting cards (48 percent), NRF said. The Prosper Insights & Analytics survey of 7,411 consumers was done March 1-9.
“Rampant discounting” by department stores and mass merchants in categories including home electronics and smartphones influenced the way consumers think about retail purchases, said First Insight CEO Greg Petro, citing survey results Monday at Shoptalk in Las Vegas. Baby boomers and Generation Xers “are less likely to consider purchasing at full price,” while millennials are less concerned about discounts, said the report. Seventy-six percent of baby boomers won't pay full price when shopping for home electronics, home appliances, furniture, smartphones and vehicles, said the report and 90 percent of all consumers surveyed acknowledged that discounts in department stores and mass merchants significantly influenced, or somewhat influenced, their expectations for discounts in home electronics. Similar expectations were shared by consumers shopping for home appliances (88 percent), furniture (86 percent), smartphones (83 percent) and vehicles (80 vehicles). More than 70 percent of baby boomers said they would definitely not or probably not buy an item in the specified categories at full price, with 79 percent saying a discount would “likely be necessary” when buying home electronics. Some 41 percent of millennials said they would definitely not or probably not buy home electronics at full price, and just 35 percent would be less likely to buy a smartphone at full price, said the report. Two-thirds of millennials surveyed were planning to buy a smartphone and 65 percent were planning to buy home electronics in the next 12 months, it said. The survey of 750 respondents was conducted in March among baby boomers, Gen Xers and millennials, it said.
Hhgregg will close 40 percent of its physical store base by mid-April and eliminate about 1,500 jobs in a drastic bid to improve its cash position, the struggling retailer said in a Thursday announcement. Shutting 88 of 220 stores in 13 states will enable hhgregg “to refocus efforts on its core markets and goals to enhance customers' experience both in-store and online,” said the chain. The stores, most of which are in Florida, Maryland, Pennsylvania and Virginia, were earmarked for closure because they're “underperforming” or are in locations “that are no longer strong shopping destinations due to changes in the local retail shopping landscape," it said. The company also will close distribution and delivery centers in Miami, Philadelphia and Brandywine, Maryland, it said. "We are strategically exiting markets and stores that are not financially profitable for us," said CEO Robert Riesbeck in a statement. “This is a proactive decision to streamline our store footprint in the markets where we have been, and will continue to be, important to our customers, vendor partners and communities. We feel strongly that the markets we will remain in are the right ones for our customers and our business model. Our team is dedicated to moving forward and being a profitable 132 store, multi-regional chain where we will continue to be a dominant force in appliances, electronics and home furnishings." About two weeks ago, hhgregg hired two Stifel Financial subsidiaries to pursue actions that would return the chain to surer financial footing (see 1702160013). Same-store sales in hhgregg’s holiday quarter fell 22 percent on competitive CE pressures and a problematic distribution center (see 1701260012).
Shares of hhgregg closed 9.3 percent higher Thursday at 47 cents after the struggling chain announced it engaged two Stifel Financial subsidiaries to pursue potential strategic and financial transactions to improve liquidity and "return to profitability." The retailer received notices from the New York Stock Exchange at the end of January and early February that it could be delisted for not meeting the minimum listing price requirement. On the company’s most recent earnings call, hhgregg CEO Robert Riesbeck called a 39 percent year-over-year hit to CE sales a major contributor to the company’s $140 million Q3 sales shortfall vs. the year-ago quarter (see 1701260012). Net loss for the holiday quarter was $58 million vs. a loss of $27 million.
Product content from Denon and Marantz is available on the SpringDeck platform and the SpringDeck Lite app for dealers to use during sales presentations, said parent company D+M Friday. Using SpringDeck, dealers can present products easily from one platform, without having to switch apps or sort through multiple product files or online databases, said D+M. Once SpringDeck is downloaded, users have the option to choose three additional product libraries from more than 100 top CE manufacturers to access product videos, cut sheets and lifestyle images, said the company. Dealers can make presentations on an iPad or using a PC browser.
With the Super Bowl two days away, Best Buy split its marketing messaging Friday between the big game and tax season. Its landing page showed a football player in a generic football helmet on a TV screen with text promoting Samsung 55-inch TVs starting at $499. Samsung’s UN65KU6290FXZA 65-inch 4K Ultra HD TV was cart-priced at Best Buy Friday at $899, $200 below the manufacturer’s minimum advertised price, and the Samsung 60-inch UN60KU6270FXZA 4K TV had sold out at $599. In an email blast to customers Friday with the subject line “Just in time! Intercept our big game TV deals,” Target offered customers its 10 percent off in-store deal on all TVs to online customers, too, with a Saturday expiration. In a blog post Friday, NPD analyst Ben Arnold said Super Bowl LI “looks to be another promising event for the TV market” with bargain hunters able to score Black Friday-like pricing across several size classes. “Those looking to upgrade their primary set to the latest and greatest technology can find deals from many of the top-tier TV brands,” Arnold said. In the week leading up to Super Bowl L last year, the average selling price for a 55-inch flat panel TV was $738, $40 lower than the preceding 12-month average and the lowest level seen for the 52 weeks ending that week, according to NPD tracking data. Prices for 4K TVs, at $962, were 11 percent lower than the 12-month average. The heavy price promotion “achieved its desired effect,” driving a 25 percent surge in 55-inch TV sales over the Super Bowl Week in 2015, Arnold said. The markets of Super Bowl teams see an added boost in TV buying, with sales in Charlotte and Denver last year spiking 47 percent in February, compared with a national bump of 30 percent, Arnold said. With Atlanta’s last trip to the Super Bowl 18 years ago, Arnold expects to see a sharp increase in unit sales in that market.
Laptops under $250, a $150 gift card for buying a Samsung smartphone and 4K TV price cuts are part of a two-day sale at Best Buy that ended Saturday, the retailer said in an email blast to customers Friday. Customers buying and activating a Samsung Galaxy S7, Galaxy S7 edge or Galaxy S7 active with a monthly installment plan on the AT&T or Verizon Wireless networks could land a $150 Best Buy gift card and a Gear Fit2 fitness tracker, said Best Buy, describing the sale as “first come, first saved.” Sprint customers who opted for one of the new Samsung smartphones qualified for the Gear Fit2 but not the gift card, it said. Best Buy was offering gift cards ranging from $50 to $200 on iPhone 7 and 7 Plus phones with monthly installment plans or lease agreements. The long list of laptops under $250 included a $169 Lenovo Ideapad 110s with an 11.6-inch screen, Intel Celeron processor, 2 GB memory and 32 GB eMMC flash memory. A 32 GB iPad mini 2 was sale-priced at $239, a $30 discount. Vizio's M55-D0 4K TV, with high dynamic range and Chromecast built-in, was priced at $699, down from $899.
GameStop remains focused on a “transformation plan” to grow its non-gaming business, evaluate store closures and execute “financial discipline,” said CEO Paul Raines in a Friday 8-K SEC filing, as sales at the company dropped 16.4 percent to $2.5 billion for the nine-week holiday shopping season ended Dec. 31. In the most recent earnings report, Raines highlighted GameStop’s diversification into digital, technology brands and collectibles to offset expected declines in game sales. The retailer's same-store sales in the holiday season fell by 18.7 percent, but the chain cited improvement from November (minus 26.6 percent) to December (minus 13 percent) that it expects to carry through January. Raines blamed lower results on “industry weakness, promotional pricing pressure and slower in-store traffic.” In its shrinking game segment, hardware revenue plunged 30 percent on a bigger-than-expected decline in PS4 and Xbox One sales, and sales of new video game software sank 23 percent, it said. GameStop's collectibles business grew 27 percent to $177 million, driven by Pokémon products, and technology brands revenue grew 44 percent to $192 million for the holiday period, driven by “strong sales” of the iPhone 6s, iPhone 7 and Samsung Galaxy 7 smartphones, it said. GameStop shares closed 8 percent lower Friday at $22.74.