Best Buy Tops Analyst Estimates, Raises Outlook

Best Buy (BBY:US) reported better-than-expected second-quarter results on Tuesday, which prompted the retailer to upgrade its full-year profit outlook.

The company's comparable sales declined by 6.2%, a notable improvement from the year-ago decline of 12.1%. This outcome was better than the expected decline of 6.4%. 

The International comparable sales also improved compared to the previous year with a decline of 5.4%, compared to the estimated decline of 5.9%. In the United States, Best Buy's comparable sales fell 6.3%, while analysts were looking for a decline of 7.3%. 

Best Buy reported adjusted earnings per share of $1.22, lower than the year-ago figure of $1.54 but surpassing the estimated $1.07. The company's revenue for the quarter was $9.58 billion, showing a 7.2% year-on-year decrease but slightly surpassing the estimated revenue of $9.53 billion. 

“Today we are reporting second quarter sales results that are at the high-end of the outlook we shared in May and profitability that was better than expectations,” said Corie Barry, Best Buy CEO. 

“These results continue to demonstrate our strong operational execution as we balance our reaction to the current industry sales pressure with our ongoing strategic investments.”

Another positive was the gross margin, which came in at 23.2%, exceeding the estimated 22.6%.

For FY24, the company sees revenue in the range of $43.8 billion to 44.5 billion. Comparable sales are now seen declining 4.5% to 6%, compared to the prior outlook for a decline of 3% to 6%.

Non-GAAP diluted EPS outlook is now hiked to a range of $6.00 to $6.40, which compares to prior guidance of $5.70 to $6.50.

BBY stock rose 4% on Tuesday. Senator John Hickenlooper and Congressman Jared Moskowitz were selling the stock earlier this year.