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reported its third quarter earnings on Thursday. Shares of the company are up 7 percent.
Below are some key highlights from its conference call.
Performance Metrics:
• Our team delivered positive comparable sales, improved profitability and continued progress in our Renew Blue transformation.
• This resulted in $9.4 billion in revenue and $0.32 in non-GAAP diluted earnings per share versus $0.18 last year.
• Operationally, this year-over-year improvement was primarily driven by a 0.6% revenue growth and the benefit from our Renew Blue and other SG&A cost reduction initiatives.
• On the top line, while sales in the NPD-reported Consumer Electronics categories declined 0.2%, our strength in televisions, computing, and tablets versus the industry.
• In addition to our growth in gaming and appliances, drove a domestic comparable sales increase of 2.4%.
• Domestic online comparable sales increased 22%.
• Also during the quarter, we continued to make progress against our Renew Blue priorities.
• In merchandising, we continued to expand our appliance offering for the opening of 15 Pacific Kitchen and Home stores-within-a-store and are on track to end the year with 117 stores versus 67 last year.
• In home theater, we opened 10 Magnolia Design Center stores within a store and are on track to end the year with 50 stores versus 33 last year.
• We also continued to expand our ultra-high definition, or 4K, TV assortment.
• In mobile, despite major phone launches being quality constrained, the adoption of installment bidding plans continued to accelerate throughout the quarter.
• Within these plans, we saw higher average phone prices and higher attach rates of services and phone accessories. In phone accessories.
• We significantly expanded our exclusive assortment through new partnerships with fashion designers and growth in our own private label brands.
• This allowed us to offer our customers an industry-leading phone case assortment in time for the new iPhone launch.
• In our retail stores during the quarter, we continued to improve the physical presence and shopping experience by expanding our fleet of appliance and home theater stores-within-a-store.
• Increasing our investment in store refresh initiatives, adding compelling vendor displays.
• Increasing sales training and integrating new vendor-funded labor into our premium customer experiences.
• While traffic to our stores continued to decline year-over-year, the trends improved compared to the first half of the year.
• In services, we continued to increase our NPS, or Net Promoter Scores, and drive down costs through operational efficiencies.
• We also launched a loss and theft mobile phone insurance program to supplement our historical Geek Squad protection plans.
Profitability Initiatives:
• So number one is the customer facing changes that we have on our site and in our stores, including the merchandising and labor upgrade I discussed earlier, that touched many of our key categories, especially home theater, accessories, appliances, emerging categories such as health and wearables and connected home and digital imaging.
• Second, our ability this year to sell installment billing plans in the mobile phone category.
• Third, a more inspirational gifting strategy, including a greater assortment of products below $100.
• Fourth is a more defined and structured approach to our promotional strategy, including greater analytics around competitive response plans.
• Fifth, more relevant and targeted marketing investments, including a more concise statement of our value proposition, Expert Service. Unbeatable Price.
• And sixth, increased inventory availability due to the rollout of ship-from-store to 1,400 stores versus 400 stores last year.
Financial Metrics:
• Enterprise revenue increased 0.6% to $9.4 billion.
• Enterprise non-GAAP diluted EPS increased $0.14 to $0.32, primarily driven by higher revenues and the flow-through of our Renew Blue and other cost reduction initiatives.
• We also saw a $0.02 per share benefit associated with the restitution from a legal claim.
• In addition, the lower tax rate this year drove an incremental $0.02 per share benefit due to favorable discrete tax events.
• Domestic revenue of $8 billion increased 2.3% versus last year.
• This increase was partially offset by the timing of recovery on mobile phone trade-in liquidations, store closures.
• Domestic online revenue was $601 million and comparable online sales increased 21.6%,
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