Best Buy (BBY) Stock Rallies Sharply After Solid Earnings Beat
Shares of Best Buy Co. Inc. (BBY) were trading up +5.51 or +16.80 percent to $38.31 per share in Tuesday’s premarket after the company reported better than expected results for its second fiscal quarter of 2016. Best Buy stock closed at $32.80, up +0.21 or +0.64 percent in Monday’s regular trading session.
Founded in 1966 as an audio specialty store called Sound of Music in Saint Paul, Richfield, Minnesota based Best Buy Co. renamed in 1983 concentrating more on consumer electronics.
For Best Buy’s fiscal second quarter ended on July 30th, 2016, the company reported GAAP earnings of $198 million or $0.61 per share compared to $164 million or $0.46 per share in the same period one year ago.
Revenue for the quarter edged up to $8.533 billion compared to $8.528 billion in 2015’s second quarter. The analyst consensus was for the company to report adjusted earnings of $0.43 per share on revenue of $8.39 billion.
Best Buy Chairman and Chief Executive Officer, Hubert Joly stated in the company’s press release this morning that, “We are encouraged by the quality of our execution, the momentum in our business and the strength of our first half financial results. We are excited by our mission to help customers live their lives and pursue their passions with the help of technology and the growth opportunities this mission creates for us. I want to thank our associates across the company for their focus and work to deliver every day on this mission.”
In addition to the stellar earnings and revenue, same store sales increased +0.8 percent in the quarter after three consecutive quarterly declines, which surprised analysts that had forecast a decline of -0.5 percent. The combination of earnings and revenue increases and strong same store sales indicate that Hubert Joly’s attempt at turning the company around has yielded positive results.
Best Buy reiterated its guidance for revenue in the range of $8.8 billion to $8.9 billion, a change of flat to one percent growth, while international revenue is expected to be flat to a -5 percent decline. Earnings per share for the third quarter are expected to be $0.43 to $0.47 compared to $0.41 in 2015’s third quarter.
Best Buy stock will open at a 10-month high this morning and could easily test the $39.09 52 week high made in early March in today's regular trading session.
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