First-quarter results exceed expectations
Best Buy (BBY) beat analysts’ revenue and earnings expectations for the first quarter of fiscal 2019, which ended on May 5. Despite strong fiscal first-quarter results, Best Buy stock was down 5.8% as of 9:07 AM EST today. Investors may have been disappointed, as the company kept its fiscal 2019 guidance intact despite impressive results. Also, the comparable online sales growth for the domestic segment slowed down in the quarter to 12% from 22.5% in the first quarter of fiscal 2018.
The company’s revenue grew 6.8% on a year-over-year basis to $9.1 billion in the first quarter of fiscal 2019, and beating analysts’ estimate of $8.7 billion. The company’s same-store sales grew by an impressive 7.1% in the first quarter of fiscal 2019, compared to 1.6% same-store sales growth in the first quarter of fiscal 2018. Improved consumer confidence and product innovation drove the higher revenue in the quarter.
Sales of the company’s domestic segment increased 6.3% to $8.4 billion, driven by same-store sales growth of 7.1%, which was partially offset by the impact of planned store closures. The same-store sales growth in the quarter was a result of the strong performance of the mobile phone, appliances, computing, tablet, and smart home product categories. Domestic segment sales accounted for 92% of the company’s overall sales in the fiscal first quarter.
International segment sales grew 13.1% to $697 million, and same-store sales were up 6.4%.
Strong earnings growth
The company’s adjusted EPS of $0.82 handily exceeded the consensus analysts’ expectation of $0.74. The company’s adjusted EPS grew 36.7%, driven by strong sales and lower taxes.
Best Buy continues to expect its overall revenue in the range of $41.0 billion to $42.0 billion for fiscal 2019. The company expects same-store sales growth in the 0.0%–2.0% range. Finally, Best Buy expects its adjusted EPS to grow in the range of 9%–13% to $4.80–$5.00.