Best Buy (NYSE:BBY)’s Decreasing Brick and Mortar Sales Spurs Increase in Consumer Online Traffic

Beggars cannot be choosers as Best Buy (NYSE:BBY) is still facing issues with its customer traffic on its website. Even with the increased internet awareness, Best Buy (NYSE:BBY) is struggling with the shift from its brick and mortar stores to online stores; the retailer revealed on Tuesday that even though it picked up its Q2 profits compared to last year’s same quarter, but its sales declined because customers choose to shop from the comfort of their homes.

Best Buy (NYSE:BBY) stated that its revenue for Q2 was $8.9 billion. This was in fact a 1.5% decline compared to $9.3 billion from what the company stated in revenue last year. It was a little below the $8.97 billion that Wall Street (OTCMKTS: WSSSQ) projected. The net income of Q2 was $146 million with 42 cents/share in GAAP earnings.

Best Buy (NYSE:BBY) went up 44 cents/share this year, which was 32 cents/share a year ago; it was also more than analysts’ consensus of 31 cents/share.

Best Buy (NYSE:BBY)’s same-store sales for domestic products decreased by 2% whereas a 2.5% decrease in consumer electronics was also recorded.

Not all is downhill for the retailer because most of the stay-at-home shoppers prefer BestBuy.com to Amazon.com; this has resulted in a 22% increase in comparable sales for domestic online for this quarter.

Best Buy (NYSE:BBY) CEO and President Hubert Joly, reported on Tuesday morning that consumer traffic is increasing online which is causing a decline in consumers visiting brick and mortar stores. He continued by saying that Best Buy (NYSE:BBY) would be capitalizing, in the near future, on the shift that is occurring in consumer shopping patterns.

Joly stated that he wants to give customers a multi-channel experience which will result in the customer coming back to Best Buy (NYSE:BBY) one way or the other; by doing this he hopes to create customer loyalty with an increasing sales through different channels.

In order to do this, Joly reported that the company will increase its investments in initiatives that favor the customers; the retailer will do so for both virtual and physical channels.

Chief Financial Officer (CFO) and executive vice president, Sharon McCollam, added to Joly’s statement by saying that the industry is not doing too well in the consumer electronics category – a category that Best Buy (NYSE:BBY) competes in. There are also flat sales in mobile phones because of the upcoming new launches. This trend might cause the Q3 and Q4 comparable sales to drop down to low single-digit.

On Tuesday morning, Best Buy’s (NYSE:BBY) shares took a dip by 4% and went as low as 4.5%. Considering the year-to-date figures the stock look in bad shape; it has a 21% decrease since 2014’s first trading day.

Kate McShane, Citi analyst stated Tuesday morning that she is surprised at how the premarket is reacting. She thinks that comparable-store sales are expected to improve because the sales figures were affected by a dip in mobile phones demand because of the newer models coming in.