Two of the top dogs on our Dealerscope Top 101 list reported strong quarter one earnings this week, that being Best Buy and Walmart. Both retailers crushed Wall Street’s expectations, and Walmart actually experienced its best quarter one in nine years.
Best Buy reported a comparable sales increase of 1.1 percent during the first 13 weeks of its new year while Walmart experienced a 3.4 percent increase. Best Buy attributed much of its success this quarter to comparable sales increases in appliances and ecommerce. With appliances, Best Buy saw its comparable sales rise 10.5 percent during the quarter, compared to last year. Online revenue for the retailer rose 14.5 percent to $1.31 billion during quarter one and accounted for 15.4 percent of its total domestic revenue.
On the other hand, Walmart’s e-commerce revenues during the quarter grew 37 percent as they continue to make online investments to compete amongst the ranks of Amazon.
Looking ahead Best Buy offered a full-year guidance of $43.9 billion in revenue, which is slightly higher than analysts’ expectations of $43.6 billion
Next month, Best Buy’s new CEO Corrie Barry assumes her position, and feels optimistic about the future of the consumer electronics company despite the potential impact tariffs may pose on financial performance. In a statement she said quote this outlook balances our better-than-expected Q1 earnings, the fact that it is early in the year and our best estimate of the impact associated with the recent increase in tariffs on goods imported from China end quote.
Walmart’s CFO, Bretty Biggs was a tad more realistic on the tariff end admitting that increased tariffs would result in increased prices for customers. He did follow up though by assuring everyone that he and his team are actively working to manage pricing and margins in an effort to remain the low-price leader.
But while both Best Buy and Walmart are hopeful that the U.S. and China can reach an agreement, the tariff increase is expected to hit clothing, furniture, and electronics the hardest. So whatever competition exists between these two, or any consumer electronics company for that matter, they all now face a common enemy.