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Best Buy sales get an online boost, sending shares higher

A near empty parking lot in front of a Best Buy store in Montebello, California on April 15, 2020 as the electronics nationwide chain store remains closed to customers but open for pickups.

Frederic J. Brown | AFP | Getty Images

Best Buy said on Tuesday its quarter-to-date sales rose about 2.5%, driven by a surge in online shopping for electronic devices and appliances, sending its shares up 4% in extended trading.

The company, like other retailers, has been spending more on expanding its delivery network as more customers shop online due to the coronavirus crisis.

Best Buy said its online sales jumped more than three-fold in the current quarter through July 18, while overall sales rose about 15% since it started reopening stores on June 15.

The company, which had almost all its stores open as of June 22, has brought back about half of the 51,000 hourly employees it had furloughed in April.

“Best Buy’s preliminary Q2 sales results, with stores only open for a relatively brief period, reflect the importance of its products and the effectiveness of its multi-channel model,” Moody’s retail analyst Charlie O’Shea said.

Best Buy also said it would raise hourly wages for its employees by 4%, replacing its short-term incentive pay it introduced during the pandemic, from Aug. 2. It added it would raise the starting wage to $15 per hour.

The company in May projected a hit to profit margins from investments in digital sales in the second quarter after reporting a 5.3% fall in first-quarter same-store sales.

Earlier on Tuesday, Walmart Inc said it would spend another $428 million on bonuses this year, to compensate its U.S. employees for catering to a surge in demand for essential goods during the pandemic.

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