THE $500 BEST BUY CHALLENGE!!
Best Buy reports second-quarter earnings and sales that top analysts' expectations.
But its outlook for the third quarter comes in shy of Wall Street estimates.
shares tumbled is Tuesday's premarket even though the electronics retailer reported second-quarter earnings and sales that topped analysts' expectations.
The company also raised its full-year profit outlook, building on its strong performance during the first six months of the year.
Still, the retailer's stock fell about 4 percent in premarket trading, as Best Buy's third-quarter outlook was much lower than Wall Street estimates. Best Buy said it expects to earn between 79 and 84 cents a share, far below the 92 cents projected by analysts.
Here's what Best Buy reported for the second quarter ended Aug. 4 compared with what analysts surveyed by Thomson Reuters were expecting:
* Adjusted earnings per share: 91 cents vs. 83 cents expected
* Revenue: $9.38 billion vs. $9.28 billion expected
* Same-store sales: up 6.2 percent vs. up 3.7 percent
Net income was $244 million, or 86 cents per share, compared with $209 million, or 67 cents, 8 cents ahead of analysts' forecast. Best Buy , Best Buy earned 91 cents, 8 cents ahead of analysts' forecast.
Revenue climbed nearly 5 percent to $9.38 billion, surpassing the expected $9.28 billion.
Sales at Best Buy stores open for at least 12 months were up 6.2 percent overall. That included domestic same-store sales growth of 6 percent and international same-store sales growth of 10.1 percent.
CEO Hubert Joly said the sales growth "was helped by the favorable environment in which we operate and driven by how customers are responding to the unique and elevated experience we are building."
The electronics retailer has benefited, like its peers within the industry, from a healthier economy across North America with stronger consumer confidence and low unemployment, putting more money back into shoppers' pockets ahead of the 2018 holiday season.
Looking to the full year, Best Buy is now calling for same-store sales to climb as much as 4.5 percent, compared with a prior target of as much as 2 percent growth. Earnings per share should fall within a range of $4.95 to $5.10, Best Buy said Tuesday, compared with a prior range of $4.80 to $5 a share.
Earlier this year, Best Buy announced it would be closing all 250 of its smaller-format mobile phone shops in order to focus more on its core business and service options within its existing, full-service locations. It's since made several moves to do so.
Just earlier this month, the retailer said it would be acquiring health services provider GreatCall Inc. for $800 million, in a bid to sell more products to an aging demographic in the U.S.
Best Buy ," GlobalData Retail Managing Director Neil Saunders said.
Best Buy is also now working with Amazon to sell smart TVs,
. The two companies have long been considered rivals in the business. But Best Buy has managed to hold on to market share as it locks in new sources of revenue that aren't so dependent on product sales, including building its Geek Squad and in-home advisor network and expanding outside of the U.S.
As of Monday's market close, Best Buy shares are up about 33 percent over the past 12 months, bringing the company's market cap to about $22.8 billion.
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