Best Buy | $BBY Stock | Shares Fall On Weak Quarterly Online Sales & Lowered Guidance


Best Buy Co., Inc. (NYSE: BBY)


Shares of Best Buy dipped as much as 8.2% during regular trading on Tuesday, after the company warned that its profits margins for the current quarter would slow contrary to the predictions of Wall Street analysts.

During the quarter, shoppers splurged on home theaters, games consoles and mobile phones from the retailer, pushing its sales up 5% to $9.38 billion.

Best Buy, the largest electronics store chain in the US, has invested a lot of money in its e-commerce unit in recent years, a move that now appears to be paying off. The stock has gained nearly 20% since the beginning of the year, and climbed 24% year-over-year.

BBY Earnings & Outlook

The company posted net earnings of $244 million, or $0.86 per share, compared to $209 million, or $0.34 per share in the year-ago quarter. After stripping out one-time items, adjusted earnings per share came in at $0.91 per share, up 32% from the same quarter last year.

Net sales jumped from $8.94 billion in the second quarter of the previous year, to $9.38 billion. Analysts polled by Thompson Reuters were expecting adjusted earnings of $0.83 per share on revenue of $9.25 billion.

Same-store sales surpassed expectations of 4.2% from after growing 6.2%. For the full year, the company hopes to report adjusted per-share earnings of $4.95 to $5.10 compared with the previous forecast of $4.80 to $5.00.

Its adjusted earnings forecast for the current quarter lies at between $0.79 and $0.84 per share, below the Wall Street expectations of $0.92 per share. The retailer also expects to report revenue of between $9.4 billion to $9.5 billion for the current quarter, versus analyst consensus of $9.49 billion. 

Best Buy CEO Comments

Best Buy chief executive officer Hubert Joly issued the following remarks, “We are happy to report strong top- and bottom-line results for the second quarter that exceeded our expectations. Our comparable sales growth was helped by the favorable environment in which we operate and driven by how customers are responding to the unique and elevated experience we are building. We are particularly encouraged with the continued progress of our Net Promoter Scores and our continued market share gains.”

“We are excited about the progress we are making on the implementation of our Best Buy 2020 strategy and the opportunities in front of us. As a result of the strong performance in the first half of the year and our updated expectations for the back half, we are raising our full-year sales and earnings guidance,” Joly concluded.

Best Buy Co., Inc. Company Profile

Best Buy Co., Inc. provides consumer electronics, home office products, entertainment products, appliances and related services. It operates through two business segments: Domestic and International. The company was founded by Richard M. Schulze in 1966 and is headquartered in Richfield, Minnesota.

The Domestic segment is comprised of the operations in all states, districts and territories of the U.S., operating under various brand names, including but not limited to, Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video, Napster and Pacific Sales.

The International segment is comprised of all operations outside the U.S. and its territories, which includes Canada, Europe, China, Mexico and Turkey. It markets its products under the brand names: Best Buy, Audiovisions, Best Buy Mobile, Future Shop, Pacific Sales and The Phone House. –CNNMoney