Best Buy Co. Inc. (NYSE:BBY) released its second-quarter results before the opening bell on Aug. 29. While the company's earnings met projections, its revenue fell short.
The Richfield, Minnesota-based company posted earnings of $1.08 per share, topping estimates of 99 cents. Revenue grew 2% from the prior-year quarter to $9.54 billion, just shy of expectations of $9.56 billion.
Same-store sales grew 1.6% in the reported quarter, which was lower than the 2.1% growth analysts were anticipating.
Reflecting on the company's performance, CEO Corie Barry said:
"For the second quarter, we are reporting comparable sales growth of 1.6% on top of a very strong 6.2% last year. We also delivered improved profitability driven by gross profit rate expansion and continued disciplined expense management, demonstrating the culture we have built around driving cost reductions and efficiencies to help fund investments."
Domestic and international segments
Domestic revenue came in at $8.82 million, up 2.1% year over year. The company attributed the strong sales to comps growth of 1.9% as well as contributions from the GreatCall acquisition, which was only partly offset by the revenue loss from the closure of 13 large-format stores during the previous year. Online revenue came in at $1.42 billion, which grew 17.3% year over year. Higher average order values and increased traffic drove the increase.
Sales in the international segment declined 3.4% to $715 million, weighed down by the adverse impact of foreign currency changes. Comps dipped 1.9% year over year due to disappointing sales in Canada.
While the company did raise earnings guidance for fiscal 2020, it predicts lower sales due to of the coming tariffs on the company's core products such as televisions, smart watches and headphones.
Adjusted earnings per share are expected to be between $5.60 and $5.75, which is up from the previous guidance of $5.45 to $5.65. The company is also projecting revenue of $43.1 billion to $43.6 billion, as compared with its previously forecasted range of $42.9 billion to $43.9 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
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