stock is rising early Thursday, after the electronics retailer’s much-stronger-than-expected fiscal-first quarter and increased forecast, which shows the pandemic winner is still resonating with consumers.
Best Buy (ticker: BBY) earned $595 million, or $2.32 a share. Analysts were looking for EPS of $1.40 on revenue of $10.4 billion. The latest quarter’s EPS trounced the 61 cents it earned a year ago. On an adjusted basis, which excludes non-recurring items, EPS were $2.23. Revenue climbed 36% to $11.64 billion.
Same-store sales climbed 37.2%, crushing the 23.5% consensus estimate.
Looking ahead, Best Buy raised guidance, saying it expects comparable sales to climb 17% in the second quarter, and between 3% and 6% for the full fiscal year. It previously forecast a range of a 2% decline to 1% increase for the year. Consensus calls for comparable sales to rise 6.1% next quarter 2.3% for the year. The company plans to buy back $2.5 billion in stock, up from $2 billion.
Best Buy stock is up 2.2% to $119.50 in recent trading. The shares have gained more than 17% year to date and are up 53% in the past 12 months.
Best Buy got a major boost from the pandemic, as shoppers rushed to buy personal electronics and appliances as they spent more time at home, for work, school, and play. Yet the company’s previous earnings report, delivered in February, was light on sales and included a lackluster forecast, causing the shares to drop as investors worried its Covid bounce was coming to an end.
Yet today’s report may put some of those concerns to rest. Quarter-to-date same-store sales remain robust, gross margins expanded, and domestic online sales climbed even as shoppers returned to stores. Even as the U.S. reopens, many consumers are still spending more time at home, and high savings rates mean they can spring for electronics of all kinds. That plays well into Best Buy’s dominant market position in the space, which appears to be helping the company sustain its momentum as it faces difficult year-over-year comparisons in coming quarters.
Write to Teresa Rivas at [email protected]