The electronics retailer said Tuesday that sales at stores open for at least one year grew 23% during the three months ending on October 31, compared with the same stretch last year. That marked Best Buy's largest quarterly sales increase in 25 years.
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Much of Best Buy's growth came from home delivery and curbside pickup sales. Online sales boomed 174% last quarter and accounted more than one-third of the company's sales.
Best Buy's net sales increased to $11.9 billion last quarter, while its profit grew to $391 million.
While department stores and mall-based clothing retailers have struggled in the pandemic, some parts of the retail sector have surged.
Best Buy has benefited from consumers shifting their spending away from travel, leisure and other services into areas such as electronics, home improvement and sporting goods. Dick's Sporting Goods said Tuesday that sales at stores open for at least one year grew 23.2% last quarter.
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Analysts attribute Best Buy's pandemic success to its mix of stores and strong online presence.
"When it comes to higher-priced electronics, consumers are more confident purchasing from a retailer with stores, especially if they want to see and experience products before they buy," Neil Saunders, managing director of GlobalData Retail, said in a research note Tuesday.
"They also often prefer the immediacy of collection from store or curbside collection. Best Buy's model delivers on both these fronts and is serving it very well," he added.
Despite Best Buy's strong quarter, shares fell 5% during premarket trading Tuesday.
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Heading into Tuesday, shares of Best Buy had gained 40% year-to-date and some investors questioned how much longer the stock could sustain that breakneck pace. Best Buy did not provide financial guidance for the holiday period or 2021.
"While the demand for the products and services we sell remains at elevated levels as we start the fourth quarter, it is very difficult for us to predict how sustainable these trends will be due to the significant uncertainty related to the various impacts of the pandemic," Best Buy CFO Matt Bilunas said in a statement.
Additionally, Best Buy's profit rate shrank last quarter because of higher supply chain costs from online sales.
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