Best Buy Shares Move Higher on Earnings Beat

Retail chain Best Buy announced its earnings this week, revealing an earnings beat and announcing that consumers are upgrading tech to work from home.

The company said its sales grew by 20% in the fiscal second quarter and has raised its forecast for the second half of the year.

“There has been a dramatic and structural increase in the need for technology,” CEO Corie Barry said in a press release.

Fiscal second-quarter sales grew nearly 20% as consumers upgraded devices and equipment and permanently embraced habits formed over the past year including hybrid work.

The company’s shares closed Tuesday up 8.32%.

Looking ahead, Best Buy has also raised its outlook for the second half of the fiscal year. It now expects same-store sales to range from flat to down 3% versus a year ago. It previously expected a high single-digit decline.

“Over the longer term, we are fundamentally in a stronger position than we expected just two years ago,” Barry said.

Due to the coronavirus pandemic, Barry says there is “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.”

For the second quarter Best Buy reported EPS of $2.98 adjusted versus $1.85 expected, per Refinitiv.

Revenue at $11.85 billion was higher than the $11.49 billion expected, per Refinitiv.

Net sales rose to $11.85 billion from $9.91 billion a year earlier, outpacing estimates of $11.49 billion.

Best Buy said it now expects revenue to range from $51 billion to $52 billion and same-store sales growth to range from 9% to 11% for the fiscal year — higher than the prior outlook of 3% to 6% growth.

For the fiscal third quarter, the retailer expects revenue to range from $11.4 billion to $11.6 billion and same-store sales to decline between 1% and 3%.

Best Buy shares are up about 12% this year.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.