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Best Buy (BBY) +7% as demand for tech drives Q2 beats
Best Buy (BBY) said that a “dramatic” rise in the “need for technology” paved the way for a stellar Q2 as sales soared and revenue and earnings topped forecasts.
Best Buy (BBY) shares jumped 7% on Tuesday as Q2 earnings and revenue trumped forecasts, and the US electronic retailer’s CEO said that it was now in a “stronger position” compared to 2019.
During the quarter to 31st July, Best Buy posted $2.98 earnings per share – way ahead of the $1.85 consensus – and revenue of $11.85bn versus the $11.49bn expectations.
CEO Corie Barry said that the future looks bright for the company amid a “dramatic and structural increase in the need for technology”.
In the absence of theatres, consumers have been buying advanced home setups and devices to stream TV shows and movies, a trend that Best Buy has benefited from.
While pandemic-related restrictions have eased in recent months, the habits formed are set to stay in place and help same-store sales to remain flat for the second half of the year after a previous forecast of up to a 9% decline.
Full-year expectations look even better, with revenue of up to $52bn and same-store growth topping out at 11%, the latter a revision from a 3% to 6% uptick.
The retailer noted that Q3 will be unusual as it will compare to a period a year ago when online sales skyrocketed 242% as consumers made use of stimulus checks.
That is one of the reasons why revenue is only expected to come in at $11.4bn to $11.6.bn, which would represent a modest decline from Q2.
A more relevant comparison is to 2019, and the figures look impressive, with operating income doubling during that time and revenue also rising 24%.
Investors were on board on Tuesday as BBY shares rose 7.06% to $120.08 during the morning on the New York Stock Exchange.
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