Best Buy beat Wall Street estimates with a solid performance in the second quarter, with comps driven by strong electronics product demand and what the company termed a favorable environment.
In the second quarter ended August 4, Best Buy recorded net earnings of $244 million, or 86 cents per diluted share, versus $209 million, or 67 cents per diluted share, in the year-before period.
With certain tax restructuring changes of $13 million excluded in the latest quarter and net of tax restructuring charges of $2 million and investment loss charges of $3 million excluded in the 2017 period, adjusted earnings per share were 91 cents, up from 69 cents year over year. Best Buy topped a MarketBeat-published consensus analyst earnings per adjusted sales estimate of 83 cents in the quarter.
Domestic division comparable sales gained 6% in the quarter versus the 2017 period including a 150-basis point benefit resulting from a calendar shift. Best Buy said it generated comp increases across multiple categories, with home theater, computing, appliances, gaming, mobile phones and smart home being particularly strong, but declines in digital imaging and tablets.
Domestic online revenue increased 10.1% to $1.21 billion on a comparable basis, primarily due to higher conversion rates and increased traffic. As a percentage of domestic revenue, online revenue increased 80 basis points to 14% versus 13.2% in last year’s quarter.
The company posted enterprise-wide revenue of $9.38 billion versus $8.94 billion in the year-prior quarter while domestic revenue came in at $8.64 billion versus $8.27 billion in the year-previous period. Operating income was $335 million versus $321 million in the year-earlier quarter.
“We are happy to report strong top- and bottom-line results for the second quarter that exceeded our expectations,” said Hubert Joly, Best Buy’s chairman and CEO. “Our comparable 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. We are particularly encouraged with the continued progress of our net promoter scores and our continued market share gains. We are excited about the progress we are making on the implementation of our Best Buy 2020 strategy and the opportunities in front of us. As a result of the strong performance in the first half of the year and our updated expectations for the back half, we are raising our full-year sales and earnings guidance.”