Consumer electronics retailer Best Buy on Tuesday beat reduced expectations for its fiscal second quarter. BBY stock rose on the news.
The Richfield, Minn.-based company earned an adjusted $1.54 a share on sales of $10.33 billion in the quarter ended July 30. Analysts polled by FactSet predicted Best Buy earnings of $1.27 a share on sales of $10.27 billion. On a year-over-year basis, Best Buy earnings fell 48% while sales dropped 13%.
It was Best Buy's third straight quarter of declining sales and earnings on a year-over-year basis.
On July 27, Best Buy warned of softening sales amid high inflation and deteriorating consumer sentiment. The retailer cut its same-store sales targets for the fiscal second quarter and full year.
BBY Stock Climbs After Report
On the stock market today, BBY stock rose 1.6% to close at 74.89. During the regular session Monday, BBY stock dipped 0.6% to finish at 73.70.
"We are clearly operating in an uneven sales environment," Chief Executive Corie Barry said in a news release. "As we entered the year, we expected the consumer electronics industry to be softer than last year following two years of elevated growth driven by unusually strong demand for technology products and services and fueled partly by stimulus dollars. The macro environment has been more challenged due to several factors and that has put additional pressure on our industry."
In the second quarter, Best Buy's same-store sales declined 12.1%. For the current quarter, Best Buy is predicting a slightly bigger decline. For the full fiscal year, it forecast same-store sales to decline about 11%.
By product category, the biggest sales drops last quarter were in computing and home theater, the company said.
BBY stock has a subpar IBD Composite Rating of 32 out of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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