Best Buy posted better than expected results in its second quarter, with both earnings and sales gains and online growth.
For the second quarter ended July 30, Best Buy posted net earnings of $198 million, or 56 cents per diluted share from continuing operations, versus $164 million, or 46 cents per diluted share from continuing operations, in the year-before period.
Adjusted diluted earnings per share were 57 cents in the most recent quarter versus 46 cents in the period a year earlier. Analysts polled by Thomson Reuters, on average, expected adjusted diluted earnings per share to come in at 43 cents.
Comparable sales gained 0.8%. Overall revenue was $8.53 billion versus $8.53 billion in the year-prior quarter. Operating income was $289 million as compared to $288 million in the period a year earlier.
Revenue in the domestic segment was $7.89 billion versus $7.88 billion in last year’s quarter while comps increased 0.8% year over year. Operating income was $289 million versus $309 million in the quarter a year before. Domestic online revenue of $835 million increased 23.7% on a comparable basis primarily due to increased traffic, higher average order values and higher conversion rates.
In the domestic segment, electronics gained as a percentage of sales from 32% to 33% versus last year’s quarter, and appliances enjoyed a point gain from 10% to 11% of sales. The computing and mobile phones, and the entertainment segments, fell marginally as a percentage of sales while services remained flat.
Appliances also enjoyed a comparable sales gain, 8.2% in the quarter year over year, as did consumer electronics, up 4%, and computing and mobile phones, up 0.3%. Comps forservices fell 7.2% while those for entertainment tumbled 18%.
“Our teams delivered a strong second quarter, with better-than-expected revenue and profitability in both our domestic and international businesses,” said Hubert Joly, Best Buy chairman and CEO. “In our domestic business, we are reporting comparable sales growth of 0.8% versus guidance of approximately flat. This is on top of comparable sales growth of 3.8% last year. We saw continued positive momentum in our online sales, delivering a second straight quarter of nearly 24% growth. We also continued to deliver cost savings and drive efficiencies in the business, a discipline that is critical to our ability to invest in our future.”