As the consumer electronics sector continues to struggle, Best Buy posted second-quarter comparable sales and earnings declines that still managed to come in ahead of Wall Street estimates.
A Yahoo Finance-published analyst consensus estimate called for adjusted diluted earnings per share of $1.06 on revenues of $9.52 billion.
Comparable sales were down 6.2% with domestic comps down 6.3% and international comps down 5.4%, Best Buy reported. Domestic online comps slid 7.1%. Revenues were $9.58 billion with domestic revenues at $8.89 billion versus $10.33 billion and $9.57 billion, respectively, in the year-previous quarter. Operating income was $348 million versus $371 million in the year-before quarter, while adjusted operating income was $362 million versus $427 million.
Corie Barry, Best Buy CEO, said, “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. 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. Our financial results were better than expected, and they reflect a consumer electronics industry that remains challenged due to the pull-forward of demand in prior years and the various macroeconomic factors that we are all too familiar with. With that said, we continue to expect that this year will be the low point in tech demand after two years of sales declines. Next year, the consumer electronics industry should see stabilization and possibly growth driven by the natural upgrade and replacement cycles and the normalization of tech innovation.””
Matt Bilunas, Best Buy CFO, added, “In May, we noted that we were preparing for a number of scenarios within our annual guidance range, and we believed our sales were aligning closer to the midpoint of the annual comparable sales guidance. Today we are lowering the high-end of our full year revenue outlook to our previous midpoint, while keeping the low-end of our revenue guidance unchanged. At the same time, we are narrowing our profitability ranges, effectively raising the midpoint of our previous annual guidance for non-GAAP operating income rate and non-GAAP diluted EPS. As it relates specifically to the third quarter, we expect our comparable sales to be slightly better than the negative 6.2% we reported for the second quarter.”
