People wear face masks outside Best Buy in Union Square as the city resumes Phase 4 of reopening following restrictions imposed in New York City on September 24, 2020 to slow the spread of the coronavirus.
Noam Galai | Getty Images
According to Best Buy, fiscal second quarter revenue rose nearly 20% on Tuesday as consumers upgraded devices and equipment and persistently adopted the habits they formed last year – from hybrid work to streaming TV shows.
Shares rose about 9% early Tuesday afternoon.
The electronics retailer has raised its outlook for the second half of the financial year. It is now expected that sales in the same business in the second half of the fiscal year will remain unchanged from the previous year and will decrease by 3%. A high single-digit decline had previously been expected.
“In the longer term, we are fundamentally stronger than we expected two years ago,” said CEO Corie Barry in a press release. “The need for technology has increased dramatically and structurally.”
Because of the pandemic, she said, the retailer is now serving “a much larger consumer electronics installation base with customers who have an increased appetite for upgrades due to constant technological innovation and needs that reflect permanent changes in life.”
She said the company’s sales also benefited from strong consumer spending, government incentives, and higher wages and savings rates.
Relative to Wall Street expectations, based on an analyst survey by Refinitiv, for its second fiscal quarter ended July 31, the company did the following:
- Earnings per share: $ 2.98 adjusted versus $ 1.85 expected
- Revenue: $ 11.85 billion versus $ 11.49 billion expected
Best Buy net income rose to $ 734 million, or $ 2.90 per share, for the second quarter, from $ 432 million or $ 1.65 per share a year earlier.
With no items, it made $ 2.98 per share, more than the $ 1.85 per share expected by analysts surveyed by Refinitiv.
Net sales rose to $ 11.85 billion from $ 9.91 billion a year ago, beating estimates of $ 11.49 billion.
Online and in-store sales, a key metric known as same-store sales, increased 20% from the same period last year. That was more than the 18.1% growth analysts expected in a StreetAccount poll.
Best Buy expects fiscal year sales of $ 51 billion to $ 52 billion and sales growth in the same store of 9 to 11 percent – higher than the previous forecast of 3 to 6 percent growth.
For the third fiscal quarter, the company expects revenue to be between $ 11.4 billion and $ 11.6 billion, and revenue in the same business to decline between 1% and 3%.
The retailer is going through an unusual time during the pandemic when stores were only open about half the quarter by agreement. Online sales in the US rose 242% over the year-ago period – the company’s largest quarterly increase to date – as many shoppers used roadside pickup or had their purchases delivered to them. Compared to the quarter, online sales in the US were down 28.1%.
Revenue in the same store rose 5.8% in the second quarter of last year.
Barry pointed out the unique factors of the year-ago quarter, but noted that Best Buy’s sales grew 24% and operating income more than doubled compared to the second quarter two years ago before the pandemic.
The shares closed at $ 112.16 on Monday, bringing the company’s market value to $ 28.09 billion. At the close of trading on Monday, Best Buy’s shares were up about 12% this year.
Read the company’s press release here.