Best Buy Co Inc (NYSE: BBY) reported its financial results for the second quarter on Tuesday that beat Wall Street estimates. Shares of the company were up about 10% this morning on better-than-expected guidance for the full year.
Commenting on the earnings report, Raymond James analysts said:
“This coincides with our thesis that Best Buy’s best-in-class fulfilment capabilities, increasingly important [consumer electronics] items, and well-positioned peer services/GreatCall initiatives should propel it to gain further market share over both the near-term and long-term.”
Financial performance
Best Buy said its operating income in the second quarter printed at $797 million that translates to $2.93 of earnings per share. In the comparable quarter of last year, its operating income was capped at $568 million or $1.67 per share.
The consumer electronics retailer generated $11.8 billion in revenue versus the year-ago figure of $9.9 billion. According to FactSet, experts had forecast $11.6 billion in revenue and $1.89 of EPS. Same-store sales in Q2 jumped 20% versus 18.1% expected.
Future guidance
For the back half of fiscal 2021, Best Buy forecasts its comparable sales to either remain flat or see an up to 3.0% annualised growth. In its previous guidance, it had predicted an over 5.0% decline in H2 comparable sales.
The American multinational expects an up to a 3.0% decline in same-store sales in the third quarter on $11.4 billion to $11.6 billion in revenue. For the full year, it expects same-store sales to note a 9% to 11% growth on up to $52 billion in revenue.
CEO Corie Barry’s remarks
According to CEO Corie Barry, Best Buy benefitted from the easing COVID-19 restrictions that fuelled demand for consumer electronics. In her statement, she said:
“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 also very strong. We now serve a much larger install 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.”
Here’s why Mad Money host Jim Cramer said on CNBC’s “Squawk Box” that this was “a more important earnings report than many people realise.”
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Wajeeh Khan
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