Best Buy Reports Better-Than-Expected Q2 Results, Stock Skyrockets
Best Buy, the nation’s largest electronics retailer, reported impressive second quarter results, including $7.9 billion in domestic revenue, an increase of 3.9 percent compared to a year ago.
Following Monday’s stock shakeup, Best Buy stock jumped more than 15 percent at the opening bell and was up $4.41 at the Tuesday noon hour from yesterday’s closing figure of $29.27. That’s significantly more positive than other retailers around the nation, including Amazon (up 5 percent), Walmart (up 2 percent) and Target (up 2 percent).
Hubert Joly, chairman and CEO of Best Buy, said that major appliances, large screen televisions and mobile phones were the electronics retailer’s strongest performance areas. Its exclusive partnership with Apple for sales of the Apple Watch also played a small part (which was first introduced to Best Buy locations in August).
Online comparable sales jumped 17 percent, amounting to $676 million more than its 2014 Q2 results. Joly said the increase came in part from the company’s investments in its website, which ultimately increased traffic and resulted in higher conversion rates.
Looking forward into Q3 and the back-to-school season, Best Buy CFO Sharon McCollam said that with the assumption there are no material changes in consumer spending, the electronics retailer anticipates low-single digit revenue growth next quarter.
What could be considered the sole blemish on Best Buy’s Q2 posting is its international revenue. After closing 66 Canadian stores, Best Buy made $650 million less in revenue across the border, which culminated in a 25.6 percent decline versus last year. Best Buy said in its quarterly report that it expects there to be an “ongoing softness in the Canadian consumer electronics industry.”