Our Q2 non-GAAP earnings per share were $1.71 compared to $1.08 last year. She is a recognized thought leader in artificial intelligence and big data, has deep experience in running businesses known for their innovation in healthcare and has a demonstrated ability to drive growth both organically and through acquisitions. And we're seeing it across basically every aspect of what we're selling in our stores. We opened and we said at that point we brought back about half of our furloughed associates. So, you beat the consensus assessment by a country mile again this quarter. Find the latest Earnings Report Date for Best Buy Co., Inc. Common Stock (BBY) at Nasdaq.com. We will provide more examples as our plans evolve, but here are some initial thoughts on strategic implications over the next several quarters. Do the numbers hold … You could see it in how heavy the business was at our precincts and how many services people wanted to acquire. To provide more predictability and pay, a 4% increase in hourly rate replaced short-term incentive compensation for hourly store employees below the leadership level. And also, school opening and closing decisions and how long those stretch out in the period. Mike Mohan -- President and Chief Operating Officer. In fact, in the last seven weeks of the quarter, online revenue grew approximately 180% over the same period last year. Our international SG&A decreased $24 million compared to last year. Which is why we talk about things like brand love, we talk about things like safety, because those become the measures by which the brand is valued over time. Trends have remained strong in August, with sales up approximately 20% for the first three weeks of Q3, as customers demand for products that help them work, learn, cook and entertain from home continues. Zacks Equity Research Zacks Published. We're still very excited about the category and the experience we create. The company has tapped Deborah DiSanzo as president of Best Buy Health. All our stores will still ship out online orders, but approximately 250 locations will be positioned to ship out significantly more volume. Good morning. Experts have chosen 7 stocks out of 220 Zacks Rank #1 Strong Buys that have the highest potential to … And it's hard to say how long that kind of hangover effect of that continues. The Best Buy earnings report pushed BBY stock lower. On June 15, we began allowing customers to shop without an appointment at more than 800 stores across the US, and as of June 22, almost all of our stores were open for shopping. But right now, our biggest priority is making sure when you're shopping on Best Buy's digital sites, and we talked about doubling the amount of app downloads, we really want to make sure when you're looking at the item you want, that to get it by data is accurate and it's competitive, and we feel very good about that. She's also the former CEO of Philips Healthcare, where she helped bring consumer-grade automatic defibrillators to the market. So, what's prompting your view that you need to go back to a full expense rate? He also cautioned that the retailer will have higher expenses as its stores are fully reopened. To meet this increased demand, we have now returned approximately two-thirds of the furloughed associates. In terms of Q3, I would -- we would still expect to see a heightened customer demand and just, overall, some level of inventory constraints as we work through the quarter. Chris, thanks for the question. Best Buy Co., Inc. (BBY) CEO Corie Barry on Q2 2021 Results - Earnings Call Transcript Tue, Aug. 25 • 1 Comment Best Buy Co., Inc. (BBY) 2020 Regular Meeting of Shareholders Conference (Transcript) We are cognizant of all these factors. The fewer labor hours were primarily due to stores being closed to non-appointment traffic for approximately half of the quarter and our reduced store operating hours. However, we have not lost sight of the fact that people continue to suffer and we extend our sympathy to all those who have lost someone to this virus, are sick with COVID-19 or are facing financial hardship as a result of the pandemic. There are others where we think it's a little bit more moderate. We also saw lower profit-sharing revenue from our private label and co-branded credit card arrangement, which impacted our gross profit rate by approximately 20 basis points. And I think we're very well positioned as we head into Q3 into the back half from a share perspective. Two, lower advertising expense of approximately $40 million. For example, next month, we will be piloting a ship-from-store hub model to help handle significant volume pre-holiday and year-round. Yeah. Can you talk a little bit about your capacity to shift volume to that method? And we definitely see that in our customer responses. Moving to SG&A. Comparable sales in the services category declined approximately 9%. The customer is in charge. If you look at promotionality into Q3, we would expect that promotionality to be sequentially up from Q1 and Q2, but still not a year-over-year pressure. Anthony Chukumba -- Loop Capital Markets -- Analyst. As Corie highlighted, the demand for our products and services was remarkably strong during the quarter. It is too early to know exactly how much of our sales and customer shopping activity will be via digital channels over time. I'd say over the years in online, we've actually been improving our gross margin rates. I'll start with the question. Some of the dynamics that benefited Best Buy in the quarter may fade, though, executives said. Using data and analytics also allows us to quickly and productively customize operations to the local situation if necessary. Matt, it's Mike. Got it. As a reminder, we had 53% of our business done online versus 42% in Q1, so parcel expense is the biggest gross profit rate pressure. Today, we are reporting strong quarterly results, and we are encouraged to see the customer demand for our products and services, and proud of the amazing execution of our teams to these unprecedented times. We thought that was a category that was going to be well down this year heading into new launches, and it's been performing. Earnings … And so, I think it's less about distinctly calling out categories, Peter, and a little bit more about just the environment that we find ourselves in. And then, of course, we've highlighted inventory availability and mall retail strongly, all of our vendor partners are doing everything they can to catch back up. And now, we'll take the question from Michael Lasser with UBS. Best Buy Co (NYSE: BBY) releases its next round of earnings this Tuesday, August 25.Get the latest predictions in Benzinga's essential guide to the company's Q2 earnings report. And you're right, we said in the script that we've seen the share recover. We ended the quarter with $5.3 billion in cash. Good morning, everyone, and congrats to the Best Buy team on good execution. Holidays likely will be different. Before I conclude my prepared remarks, I want to talk about our ongoing commitment to diversity and inclusion in our community. Though Best Buy posted better than expected earnings, the reaction in the shares was swift and negative. X. Thanks a lot for taking my question. And that's the primary thing we're focused on for this holiday. For Best Buy, Wall Street is expecting earnings per share of 99 cents on sales of $9.56 billion. Our purpose to enrich lives through technology is more relevant than it has ever been, and we are confident regarding our execution, adaptability and the opportunities ahead. And as like many companies, we're taking the time to really evaluate when we might resume that. We still plan to be a premium dividend payer, and at some point, return all the excess cash to shareholders. Ladies and gentlemen, thank you for standing by. We ended Q1 in a curbside-only model with no in-store customer shopping. Best Buy also announced that it is increasing its quarterly cash dividend by 10% to 55 cents a share. The lower SG&A is a direct result of balanced but prudent decisions to lower costs in response to the uncertainty of the pandemic and our evolving operating model. I think about it in two different ways. Congrats on another spectacular quarter. So, we see the consumer demand strong. This compares to earnings of $1.08 per share a year ago. That's helpful. I think, ultimately, you nailed it. During the call today, we will be discussing both GAAP and non-GAAP financial measures. This is -- we're kind of in a very uncertain environment for many reasons. So, we will continue to improve the customer experience to kind of improve the gross margin rates online and continue to look at our cost structure overall for both channels. Thanks a lot, and good luck. Ultimately, as we continue to see increased demand for our products, our ability to open almost all of our stores to customer traffic much sooner than we had expected resulted in the stronger than anticipated results. Throughout the pandemic, we have been confident that we will emerge an even stronger company than we were before. You're sitting on over $5 billion worth of cash. Overall, on an annual basis, the EBIT levels of both of those channels are actually pretty similar. Stay-at-home retail trades are in the 'early innings,' analyst Dana Telsey says. X The Richfield, Minn.-based company earned an adjusted $1.08 a share on sales of $9.54 billion in the quarter ended Aug. 3. We've been improving our digital experiences. And you can see it in things like attach rate of services in the store. approximately 51,000 hourly workers that it furloughed. Hey. Overall, as we plan for the back half of the year, we continue to weigh many factors, including a potential future government stimulus actions, the current shift in personal consumption expenditures from areas like travel and dining out, the possible depth and duration of a pandemic, the risk of continued higher unemployment and the availability of inventory to match customer demand. This decline in labor hours was partially offset by higher hourly wage rates, mainly incremental appreciation pay for those who are working in our stores throughout the quarter. And we've been able to use our analytics and algorithms to understand where the density in shipping volumes will come from. The increase was driven by comparable sales growth of 15.1%, which was partially offset by 490 basis points of negative foreign currency impact. Shares of the company were down about 4% Tuesday afternoon, after Best Buy referred to the uncertain economic backdrop and declined to provide a financial outlook for the rest of the year. I'd like to provide some insight into our approach, starting with three concepts we believe to be permanent and structural implications of the pandemic. Domestic non-GAAP SG&A decreased $195 million compared to last year and as a percentage of revenue, decreased approximately 280 basis points. Hi. And if you look at store labor hours in total, while we are increasing labor hours for them being open and also -- we've also increased the hourly wage rate. Welcome to Best Buy's Q2 fiscal 2021 earnings call. Matt will provide more detail later, but we expect Q3 SG&A expense to be more in line with last year's third quarter. And our second quarter also includes lapping last year's prime day business, where we do a lot of revenue with our own exclusive models with our Amazon Fire TV. She said manufacturers and its supply chain are "running at holiday levels.". Domestic total revenue of $9.13 billion, up 3.5% from $8.82 billion. Turning to profitability. Good morning. Does it have to do with still trying to control traffic into the store or the tighter inventory levels? Best Buy reported second-quarter net income of $432 million, or $1.65 per share, a significant increase from $238 million, or 89 cents per share, a … In relation to SG&A, we made several cost decisions in Q1, and as we entered Q2 to align with the lower sales and channel trends we were seeing and expecting to continue at that point. During the first half of the year, in responding of the pandemic, we made decisions across all these operating models that stressed safety. Analysts had expected Best Buy earnings of $1.08 a share on sales of $9.71 billion. We are planning for Q3 sales to be higher compared to last year, but likely will not continue at the current level of approximately 20%. Because the expectation for flat expenses in the third quarter seems to assume some reinvestment. And we also said we view that as very temporal in nature. Their willingness, even enthusiasm, to continually adapt as we manage through the evolving environment has been extraordinary. I'll share a few examples of how this is showing up in our app, which saw the number of customer downloads double compared to last year. It was actually a little less than we actually expected as we work through the quarter. But overarchingly, we feel pretty strongly that we are in a good share position. And obviously, we saw demand for people wanting to come back into our stores. However, the retailer cast a cautious eye toward the future as it said everything from government stimulus to the unemployment rate could change how much customers spend in the coming months. Said differently, people are using technology to address their needs in ways they never contemplated before, and we play a vital role in bringing tech to life for both customers and our vendor partners. Throughout this time period and across all the ways customers can shop, we have continued to adhere to safety protocols that limit capacity, follow strict social distancing practices and use proper protective equipment, including requiring our employees and customers to wear masks. Yeah, I think you've got, actually both of the answers and a part of your question, is the one category that is most dependent on our store traffic for the customer experience to make sense. As you would imagine, these concepts are extensive and interdependent, and we are both implementing change today and assessing future implications across our business. Sure. We've been building a phenomenal and flexible supply chain, and have employees in stores that are moving at speed with the customer. For the first six months of its fiscal year, Best Buy … We're not going to give specifics. That Consumer electronics retailer guided higher for full-year sales and earnings. And 60% right now of what we're selling is flowing through our stores in some way, either curbside or in-store pickup or ship from store. Deborah has more than 30 years of experience at the intersection of healthcare and technology, including leading the IBM Watson health team, where she launched artificial intelligence offerings designed to help doctors, researchers, healthcare providers, pharmacists and insurers better serve patients around the world. It's partially designed to lower expenses because we can absolutely have more customers pick up in-store, that's what's happening with these locations. We are also continuing to add additional third-party physical pickup locations for online orders to provide more flexibility and convenience for customers, and now have more than 16,000 covering 85% of the population within five miles. With that said, as we enter Q3, there continues to be a heightened demand for the products and services we offer. Was that essentially fully offset by a lower promotional posture year over year, or was the net of those two things actually positive? Within the quarter, our sales growth continued to improve as our stores reopened. We'll see how it ends up, but a little bit more than Q2. And next we'll hear from Brian Nagel with Oppenheimer. Congratulations. As a result, we are starting to evolve the way we use our stores for fulfillment. We also expect lower profit-sharing revenue from our credit card arrangement. The growth was primarily driven by Canada, where we experienced similar trends in our domestic segment from a product category standpoint, and we were able to open almost all locations without appointment approximately two weeks sooner than we did in the US Turning now to gross profit. And Corie, my follow-up is you discussed that SG&A expenses will be similar to last year in the third quarter. Right now, we are building the foundation by leading our store employees through skills-based training for their existing roles. For our second quarter, we are reporting revenue of $9.9 billion, which is growth of approximately 4% from the second quarter of last year. We first -- we're always going to reinvest in our business to do what's right for our customers in the long term. Thank you, Anthony, for the compliments. Thanks for taking my questions. I'll start, Kate, and maybe Matt can follow some of that promotional commentary. On August 2, the beginning of our third quarter, we implemented a new pay structure that reflects an ongoing evolution and is the result of clear and consistent feedback from field employees across the country. Very nice quarter. On a comparable basis, our online revenue increased 242% over the second quarter of last year. Even when stores opened for customer shopping, online sales growth continued to be extremely strong. And when we look at what we did for automation over the last three and the things that we had to do, it's very easy for us to receive products in our seven RDCs and then put them on the normal truck runs out to the stores that we already do and if we need to run extra trucks out to these 250 locations, so we can actually have rapid replenishment. Exactly how much, we'll determine by how much sales we actually have and how much gross profit rate pressure we'd be able to offset. 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