Results ahead of expectations
Best Buy (BBY) stock was down 5.4% at 8:50 AM Eastern in today’s pre-market hours, following the announcement of the company’s results for the second fiscal quarter of 2019. The quarter ended on August 4. Best Buy reported better-than-expected revenue and earnings. However, the company’s online sales growth decelerated yet again. Investors were also let down by lower-than-expected earnings guidance for the third quarter of fiscal 2019.
Best Buy’s revenue grew 4.9% on a year-over-year basis to $9.38 billion. Analysts were expecting revenue of $9.28 billion. The company’s same-store sales grew by an impressive 6.2%, compared to 5.4% growth in the second fiscal quarter of 2018.
Improved consumer spending and the company’s initiatives under its Best Buy 2020 strategy are boosting top-line growth.
Best Buy’s online sales growth was 10.1% in the second quarter of fiscal 2019—a major slowdown compared to its 31.2% rise in the second fiscal quarter of 2018.
Best Buy’s adjusted EPS grew 31.9% to $0.91, beating analysts’ expectation of $0.83. Higher revenue and lower taxes drove EPS growth in the quarter.
Following the strong performance in the first half of fiscal 2019, Best Buy raised its outlook for fiscal 2019 as a whole. Best Buy now expects fiscal 2019 same-store sales growth of 3.5% to 4.5%, compared to the previous guidance of 0.0% to 2.0% growth. The company expects adjusted EPS in the $4.95–$5.10 range. Best Buy previously expected EPS in the $4.80–$5.00 range.
For the third quarter of fiscal 2019, Best Buy anticipates adjusted EPS growth of 1.0%–8.0% to $0.79–$0.84. Analysts were expecting adjusted EPS of $0.92. The company expects its fiscal third quarter same-store sales growth in the 2.5%–3.5% range.