Best Buy faces constraints, supply chain starting to improve — Panjiva
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Best Buy faces constraints, supply chain starting to improve

Cons. Discr. - Durables 511 Cons. Discr. - Retailing 465 Coronavirus 511 Earnings 724 Quote Watch 452 U.S. 5314

Electronics retailer Best Buy reported fiscal Q2’20 (to Aug. 1) which increased by 3.9% year over year, led by “products that help people work, learn, connect and cook at home, like computing, appliances and tablets” in the face of the COVID-19 pandemic, according to CEO Corie Barry. The firm’s expectations factor in “Q3 sales to be higher compared to last year but likely will not continue at the current quarter-to-date level of approximately 20% growth” of the first three weeks of the new quarter.

While demand was strong the firm struggled to meet requirements with “stronger than anticipated demand” during the quarter “resulted in more constrained product availabilityaccording to Barrie. One challenge faced by the firm is that a significant part of its inventory is led by large scale consumer electronics that have long lead times that require seaborne shipping.

There’s been a marked scaling up of supplies based on international shipping data. Panjiva’s data shows that U.S. seaborne imports of household appliances and consumer electronics have climbed by 49.5% and 5.0% respectively in the first half of calendar Q3. The surge in shipments of household appliances has been led by a jump in imports of refrigerators associated with Samsung Electronics and LG Electronics.

Stay at home imports soar at start of Q3

Chart segments U.S. seaborne imports by industry. Data for Q3’20 based on July 1 to Aug. 15 period.  Source: Panjiva

U.S. seaborne imports linked to Best Buy saw a marked downturn in calendar Q2’20 with a 34.7% year over year slide led by a 74.9% drop in shipments of televisions and a 46.3% drop in shipments of ovens. The situation has improved in the first half of Q3 (July 1 to Aug. 15) with imports of televisions up by 11.2% and ovens down by just 23.8% among others. That’s meant total U.S. seaborne imports associated with Best Buy only dipped by 5.6% year over year in the first half of Q3.

Best Buy’s downturn is slowing, recovery not yet widespread

Chart U.S. seaborne imports linked to Best Buy by product. Q3’20 based on July 1 to Aug. 15 period.  Source: Panjiva

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