Consumer electronics retailer Best Buy on Tuesday beat Wall Street's targets for its fiscal second quarter but offered a mixed outlook for the back half of the year. Still, BBY stock jumped on the news.
The Richfield, Minn.-based company earned an adjusted $1.22 a share on sales of $9.58 billion during the quarter ended July 29. Analysts polled by FactSet expected Best Buy earnings of $1.06 a share on sales of $9.52 billion. On a year-over-year basis, Best Buy earnings dropped 21% while sales declined 7%.
"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," Chief Executive Corie Barry said in a news release.
She added, "We continue to expect that this year will be the low point in tech demand after two years of sales declines."
BBY Stock Rises After Report
Barry predicted that sales would stabilize or possibly grow next year thanks to "natural upgrade and replacement cycles."
On the stock market today, BBY stock climbed 3.9% to close at 76.93.
BBY stock reached its all-time high of 141.97 in November 2021 during the Covid-19 pandemic. The work-from-home, school-at-home and shelter-in-place trends of the pandemic drove significant sales growth for the consumer electronics retailer. Since then, sales and earnings have declined amid the return to normalcy.
Best Buy's sales and earnings have fallen for seven straight quarters on a year-over-year basis.
Wall Street analysts are calling for Best Buy to return to sales and earnings growth in its fiscal fourth quarter, which ends in January.
Best Buy Raises Earnings Outlook
For its full fiscal year, Best Buy now expects to earn an adjusted $6.20 a share on sales of $44.2 billion. That's based on the midpoint of its outlook. Its prior forecast called for adjusted earnings of $6.10 a share on sales of $44.5 billion.
Wall Street was expecting fiscal 2024 earnings of $6.07 a share on sales of $44.2 billion.
BBY stock has an IBD Composite Rating of 41 out of 99, according to IBD Stock Checkup. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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