Good morning, everyone. And thank you for joining us. Today, we are reporting record Q2 financial results of $11.8 billion in sales and non-GAAP diluted earnings per share of $2.98. Comparable sales growth was 20% and our non-GAAP operating income growth was 40%.
We are lapping an unusual quarter last year as our stores were limited to curbside service or in-store appointments for roughly half the quarter. When we compare to two years ago, our results are very strong. Compared to the second quarter of fiscal '20, revenue was up 24% and our non-GAAP operating income is up 115%. Clearly, customer demand for technology products and services during the quarter remained very strong.
Customers continue to leverage technology to meet their needs and we provide solutions that help them work, learn, entertain, cook and connect at home. The demand was also bolstered by an overall strong consumer spending, aided by government stimulus, improving wages and high savings levels.
From a merchandising perspective, we saw strong comparable sales growth in almost all categories. The biggest contributors to the sales growth in the quarter were home theater, appliances, computing, mobile phones and services. Product availability improved in the quarter. And except for some pockets in appliances and home theater, we do not believe it materially limited our overall sales growth.
Our merchant, demand planning and supply chain teams once again did an amazing job managing through the difficult and constantly evolving supply chain environment. They worked strategically to bring in as much inventory as possible during the quarter with actions like acquiring additional transportation, pulling up product flow and adjusting store assortment based on availability.
There will continue to be challenges, particularly as it relates to congested ports and transportation disruptions. But our teams have set us up for as strong an inventory position as possible as we move forward into the back half of the year. As we think about the holiday period, we often have varying degrees of inventory and supply chain challenges and this year will be no different. But we feel confident in our ability to serve our customers during the holiday. The continued strong demand across retail resulted in an overall less promotional environment, which was a significant driver of our better-than-expected profitability in the quarter.
During the quarter, we provided customers multiple ways to interact with us depending on their needs, preference and comfort. Similar to last quarter, customers migrated back into stores to touch and feel products and to seek in-person expertise and service. At the same time, they continued to interact with us digitally at a significantly higher rate than pre-pandemic as online sales were 32% of domestic revenues compared to 16% in Q2 of fiscal '20. Phone and chat volume also remained very high compared to pre-pandemic and sales via these channels continued to climb.
In addition, of course, we are interacting with customers in their homes, making large product deliveries, installing solutions, repairing products and providing sales consultations. In fact, overall, we are helping our customers with their technology needs in their homes 20% more than we did two years ago in Q2 of fiscal '20. Through all of these interactions, across all of these touch points, 98% of surveyed customers tell us they feel very safe, which we believe is still incredibly important at this stage in the pandemic.
I want to genuinely thank our store and in-home teams for creating this safe environment for our customers and for continuing to provide exceptional service even in situations where customers resisted following safety guidelines and, in some cases, were disrespectful.
For customers purchasing online, we delivered product with speed and convenience. Online sales package delivery was not only much faster than last year, it was faster than two years ago. Furthermore, we stack up extremely well versus our competition. Using a third-party service, we analyzed competitor websites on a daily basis, and we consistently lead in the proportion of one day or less for published shipping time across a sample of higher volume ZIP codes and higher demand items.
In addition, we leveraged our stores to drive fast and convenient fulfillment of online orders. In Q2, we continue to see about 60% of our online revenue fulfilled by stores, including in-store or curbside pickup, ship from store or Best Buy employees who are delivering product to customers out of more than 450 of our stores. The percent of online sales picked up by customers at our stores was 42%, similar to last year's second quarter.
Clearly, the landscape as it relates to the pandemic has been changing rapidly and we remain keenly focused on keeping our employees and customers safe. We are continuing to encourage all employees to get COVID vaccinations by providing them with paid time off when they receive the vaccine and providing them absence time to be used in the event they develop side effects.
In June, we launched an employee sweeepstakes with more than $100,000 in cash prices to encourage our team members to get vaccinated. To show our appreciation for their hard work and ongoing efforts in the face of pandemic fatigue, we paid employee gratitude bonuses at the beginning of the quarter.
In summary, our team has delivered incredible results. To all of our associates across the company, I thank you for your customer obsession, perseverance and ingenuity. Of course, while we were driving these great Q2 results, we were also looking to the future. During the quarter, we continued to roll out and run several tests and pilots as we determine the best path forward to become an even more customer-centric, digitally-focused and efficient company. We believe this is crucial to thriving in a new and different environment where customers expect to seamlessly interact with physical and digital channels throughout the shopping journey as they seek inspiration, research, convenience and support.
Last year, we introduced a very important membership pilot called Best Buy Beta. As a reminder, it includes unlimited Geek Squad technical support on all of the technology in your home, no matter where or when you purchased it, including 24/7 VIP access to dedicated phone and chat teams that are only available to members. It also includes up to 24 months of product protection on most purchases from Best Buy, free delivery and standard installation, exclusive member pricing, a 60-day extended return window and free shipping of online orders, all for $199 per year.
The offer is designed to give our customers the confidence that whatever their technology needs are, we will be there to help. It leverages our unique strengths and what we can provide customers that no one else can. The goal is to create a membership experience that customers will love, which in turn results in a higher customer lifetime value and drives a larger share of CE spend to Best Buy. We are very excited about this membership offer and we are encouraged by the pilot results.
Membership acquisition has exceeded our initial forecast. In addition, data is showing that Beta members interact more frequently and have a higher incremental spend than non-members. Given the breadth of the offer, it is resonating well across all customer demographics. And our members are skewing younger than our Total Tech Support membership program. In addition, our employees love telling customers about the program.
We plan to scale the program nationally in stores and online at the end of Q3 under the new name Best Buy Total Tech. As part of the national rollout, we will be converting our 3.1 million existing Total Tech Support members to the new program. I want to stress that the goal of the program is for customers to find value in the benefits and use them often. It is not designed to be a stand-alone margin-driving service offering, particularly in the near-term. In fact, as Matt will discuss later, a full rollout is a near-term investment, which we are confident will be justified with incremental sales growth and long-term customer value.
As it relates to our physical stores and operating model, we are continuing to pilot and test many approaches and formats. Specifically, we are testing more experiential stores, how we can leverage our stores and facilities for more fulfillment purposes and how we can deliver customer experiences with a more flexible, digitally supported and engaged workforce.
We are not going to outline all of our initiatives today, but I would like to provide a few updates and learnings. We have begun implementing the pilot of our new holistic market approach in Charlotte. As we mentioned last quarter, this pilot is designed to leverage all our assets in a portfolio strategy across stores, fulfillment, services and outlet, lockers, our digital app and both in-store and in-home consultation labor.
We will be testing an array of different prototypes, including remodeling a number of stores to 15,000, 25,000 and 35,000 square foot stores as well as launching a few new smaller 5,000 square foot stores. We expect the full rollout of the pilot to span a few quarters. And several store remodels are currently underway, including the transition of one store into a new type of outlet. Our current 15 outlet stores focus mainly on large appliance and TV open-box product. With this new outlet pilot, we will have open-box products from all categories. It will also serve as the hub in a new services repair hub-and-spoke model we are testing as well as an AutoTech mega hub for our car tech installation.
Of course, the reason we are piloting and testing so much is because we are trying some unique prototypes. And we need the opportunity to learn and adjust before we roll more broadly. For example, in our four Minneapolis test stores where we reduced the shoppable square footage to 15,000 square feet to provide more space for fulfillment, we have been making adjustments based on customer and employee feedback.
We've reflowed some of the layouts, added signage to help customers understand the changes we are testing and added assortment in areas like small appliances, printing and accessories. We will continue to evolve these test stores based on learnings and feedback. As it relates to our Houston experiential 35,000 square foot store pilot, we continue to receive positive feedback from customers and employees on store design and the way we are showcasing products. In addition, year-to-date, this store generated higher revenue than control stores in the double-digit percent range.
Another pilot that we are excited to launch preholiday is our virtual store. For this, we are building out a physical store in one of our distribution centers that will have merchandising and products and will be staffed by dedicated associates, including vendor-provided expert labor, but it will have no physical customers. Instead, customers can interact with our experts via chat, audio, video and screen sharing depending on their preference and be able to see live demos, displays and physical products.
We are excited about the customer use cases this provides. For example, you could be on our dot-com experience, click on a product you like and be connected via video to a Blue Shirt in the Best Buy virtual store and never leave your living room. Or you could be standing in a store, scan a bar code and be taken through your phone directly to this virtual store where an associate could answer your question.
From a fulfillment perspective, our ship-from-store hubs we piloted last year were very successful and we are continuing to iterate on the model. As a reminder, while all stores will continue to ship online orders, we are driving efficiency and effectiveness by consolidating ship-from-store units in a limited number of stores across the country. As we have evolved the model overall, we are using fewer stores than last year as hubs.
In addition, we've begun remodeling a subset of stores to deliver an even greater portion of the volume, reducing the sales floor square footage and installing warehouse-grade packaging station equipment and supplies. These 13 locations should be rolled out by holiday and take on about 25% of the national ship-from-store volume. As you would expect, the various tests and pilots are intended to identify how our store portfolio should evolve from the role they serve to their look and feel. As we learn from these tests, we will develop plans that likely include a rollout of investments in more stores and markets.
We have also been evolving our labor model to meet our customers' changing shopping behaviors. For our employees, we are designing for more choice, flexibility and career opportunity. We continue to see momentum with our flexible workforce initiative, which is centered on store employees becoming certified to gain expertise to perform roles outside of their primary job function.
At the end of July, 80% of our associates were eligible to flex into different work zones and 50% of associates have earned four or more jobs. This allows our employees and us to schedule shifts more flexibly within the store and between channels like virtual sales, chat, phone, remote support or employee product delivery. And very soon, we will be able to schedule associates between stores within a market. This flexibility is important for all of our stores going forward, but even more important for our smaller stores with less labor.
This new way of working empowers employees to develop their careers by giving them opportunities to learn new skills, broaden their experience and have more flexibility in their jobs. They are equipped to confidently help customers in more ways. And our data is showing us that once employees add skills, they tend to drive a higher customer NPS. It also gives team members the ability to earn a different hourly wage depending on the job performed and the potential for working additional shifts that otherwise may not have been available in their primary job function.
We believe our flexible workforce initiatives can add to our ability to attract and retain our employees, particularly in this tight labor market. And in addition to the training and flexibility we offer, we have also invested significantly in compensation and benefits for our associates. On top of raising our starting wage to $15 last year, we provide a wide array of competitive benefits across many dimensions, including tuition reimbursement, employee product discounts, paid time off for part-time associates, backup child care, child tutor reimbursement, mental health support and many others.
Overall, we are operating with a smaller field workforce than we were pre-pandemic, which is very reflective how the business model has changed as our online revenue has more than doubled from two years ago. We feel like we are largely at the right number as it relates to the strategic evolution of our operating model, the demand we are seeing and the nature of our customer interactions. What is most important right now is to continue to learn and iterate.
As you can imagine, having a more flexible workforce is a very important component of our operating with a smaller workforce and technology is crucial to its success as well. In fact, technology is the underpinning to the success of our company strategy. We need technology tools and capabilities to help us as we transform and evolve the way we operate. This fact has been clearly reinforced by all of our pilots.
There are a myriad of technology projects in development, but here are just a few examples. We will leverage the electronic sign labels in our stores to make it simpler and more seamless for customers to shop, especially in our stores with smaller shopping square footage. Specifically, we are adding messaging to the labels that mimics our dot-com experience. In other words, customers will easily be able to see if the product is in stock in that store or in another store nearby and when it could be delivered and installed.
We are also piloting mobile app checkout so that customers, particularly grab-and-go customers, can quickly check out without needing to interact with an associate. For our virtual store to really come to life seamlessly for our customers, we are building out a new digital communication platform that will combine multiple systems into one experience for call, chat, video and screen sharing. This will quickly and seamlessly put our customers in control of how and when they want to be served across these vehicles.
Of course, we are also continuing to make significant investments in fundamental technology capabilities like data and analytics and broader cloud migration in order to drive scale, efficiency and effectiveness. Earlier this month, Fast Company named us to its 2021 list of the 100 Best Workplaces for Innovators. This is our first time on the list, which recognizes companies that created cultures of innovation despite the challenges posed by the pandemic.
During the quarter, we continued to expand our assortment in newer categories where we can leverage our ability to commercialize new technology. For example, in the past year, across fitness and wearables, wellness and health, we have more than doubled our vendor partners and grew our SKU count by more than 150%. These include new products important to our health strategy, specifically those focused on conditional health management that help customers track blood glucose levels, keep tabs on heart data, manage weight or even help identify allergens in foods. Furthermore, we are working with hospitals and care centers to curate health products for their patients on co-branded landing pages.
Because customers are looking to us to complete their solutions, we are also expanding to additional adjacent categories. For example, we have expanded our assortment in categories like outdoor living as more and more consumers look to make over or upgrade their outdoor spaces. This includes products like patio furniture, grills, fire pits and electric mowers, to name a few. Many of these products are available online-only as part of our digital-first strategy. Altogether, they are a small part of our overall business, but growing fast as we continue to add to the assortment. In the back half of the year, we expect to add more products in the fitness, beauty, sleep, pain management, vision, hearing and electric transportation categories.
Before I conclude my prepared remarks, I want to update you on our ongoing commitment to inclusion and diversity and our community. During the second quarter, we announced our commitment to spend at least $1.2 billion with BIPOC and diverse businesses by 2025. This pledge includes plans to increase all forms of spending with Black, Indigenous and People of Color businesses from nearly every corner of the company from how we bring goods and services to stores to where and how we advertise. The goal is to create a stronger community of diverse suppliers and to help increase BIPOC representation in the tech industry.
In addition, earlier this month, we announced we are investing up to $10 million with Brown Venture Group, a venture capital firm that focuses exclusively on Black, Latino and indigenous technology startups. The goal of this investment is to help break down the systemic barriers often faced by BIPOC entrepreneurs, including lack of access to funding and empowering the next tech generation.
To make a difference in our local communities, we are passionate about building out our Teen Tech Center program. These provide teams in disinvested communities access to the training, tools and mentorship needed to succeed in post-secondary opportunities and careers. We are also building a diverse talent pipeline for jobs of the future. During the second quarter, we launched our first-ever opportunity for customers to donate to the Best Buy Foundation in support of Teen Tech Centers. Between July 11 and September 11, customers can choose to donate when they make a purchase, including at a Best Buy store, bestbuy.com or the Best Buy app.
We also just published our 16th annual ESG Report, which outlines how we are working across the company to have a positive impact on our planet, employees, customers and communities. In terms of the environment, this past year we exceeded our goal to reduce carbon emissions in our operations by 60% through investments in renewable energy and operational improvements. We are on track to reduce our carbon emissions 75% by 2030 and we signed the Climate Pledge committeed to be carbon neutral by 2040, a decade faster than our previous goal of 2050.
We also have a robust trade-in program that brings a useful second life to products that might otherwise sit idle in someone's home or end up in a landfill. For products that need to be recycled, we continue to operate the most comprehensive consumer electronics and appliances take-back program in the US, taking back more than 2 billion pounds since 2009. Available on our corporate website, our ESG Report also outlines the ways we support our employees and communities.
In summary, we have delivered a remarkable first half against a volatile backdrop. I am so proud of the execution of our teams as they continue to safely meet the needs of our customers in ways that I would argue no one else can. Based on the strength of the business and our expectations for continued customer demand, we are raising our sales outlook for the back half.
Of course, the environment as it relates to the pandemic is still rapidly evolving and there is uncertainty as to the associated impact on many important factors, including consumer shopping behavior, share of wallet on services like dining and travel, return to office and return to school. Furthermore, we continue to believe the holiday season will remain unique against that backdrop. That being said, our teams have proven they can and will continue to proactively navigate these factors. And they remain ready to respond and adjust the business as the environment potentially changes.
Over the longer term, we are fundamentally in a stronger position than we expected to be in just two years ago. There has been a dramatic and structural increase in the need for technology and we now serve a much larger installed base of consumer electronics with customers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect permanent life changes like hybrid work and streaming entertainment content.
This is only underscored by the recent Senate passage of the Infrastructure Bill, which will provide even more access to broadband and give us the opportunity to serve the needs of currently underserved communities. Our unique omnichannel assets, including our ability to inspire what is possible across the breadth of CE products as well as our ability to keep it all working together the way customers want, truly differentiate us going forward in this new landscape.
Now, I would like to turn the call over to Matt for details on our results and insights on our outlook for the next quarter and the full year.
