Best Buy’s (NYSE:BBY) Q2 Earnings Results: Revenue In Line With Expectations, Stock Soars
Electronics retailer Best Buy (NYSE:BBY) reported results in line with analysts’ expectations in Q2 CY2024, with revenue down 3.1% year on year to $9.29 billion. The company’s outlook for the full year was also close to analysts’ estimates with revenue guided to $41.6 billion at the midpoint. It made a non-GAAP profit of $1.34 per share, improving from its profit of $1.22 per share in the same quarter last year.
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Best Buy (BBY) Q2 CY2024 Highlights:
- Revenue: $9.29 billion vs analyst estimates of $9.25 billion (small beat)
- EPS (non-GAAP): $1.34 vs analyst estimates of $1.16 (15.7% beat)
- The company dropped its revenue guidance for the full year to $41.6 billion at the midpoint from $41.95 billion, a 0.8% decrease
- EPS (non-GAAP) guidance for the full year is $6.23 at the midpoint, beating analyst estimates by 2%
- Gross Margin (GAAP): 23.5%, in line with the same quarter last year
- EBITDA Margin: 6.1%, in line with the same quarter last year
- Free Cash Flow Margin: 5.1%, up from 3.3% in the same quarter last year
- Same-Store Sales fell 2.3% year on year (-6.2% in the same quarter last year)
- Market Capitalization: $18.94 billion
“Today we are reporting better-than-expected sales and profitability results for the second quarter,” said Corie Barry, Best Buy CEO.
With humble beginnings as a stereo equipment seller, Best Buy (NYSE:BBY) now sells a broad selection of consumer electronics, appliances, and home office products.
Electronics & Gaming Retailer
After a long day, some of us want to just watch TV, play video games, listen to music, or scroll through our phones; electronics and gaming retailers sell the technology that makes this possible, plus more. Shoppers can find everything from surround-sound speakers to gaming controllers to home appliances in their stores. Competitive prices and helpful store associates that can talk through topics like the latest technology in gaming and installation keep customers coming back. This is a category that has moved rapidly online over the last few decades, so these electronics and gaming retailers have needed to be nimble and aggressive with their e-commerce and omnichannel investments.
Sales Growth
Best Buy is a behemoth in the consumer retail sector and benefits from economies of scale, an important advantage giving the business an edge in distribution and more negotiating power with suppliers.
As you can see below, the company’s revenue was flat over the last five years as its store count and sales at existing, established stores both shrunk.
This quarter, Best Buy reported a rather uninspiring 3.1% year-on-year revenue decline to $9.29 billion in revenue, in line with Wall Street’s estimates. Looking ahead, Wall Street expects revenue to remain flat over the next 12 months.
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Same-Store Sales
Best Buy’s demand has been shrinking over the last eight quarters, and on average, its same-store sales have declined by 7% year on year. The company has been reducing its store count as fewer locations sometimes lead to higher same-store sales, but that hasn’t been the case here.
In the latest quarter, Best Buy’s same-store sales fell 2.3% year on year. This decrease was an improvement from the 6.2% year-on-year decline it posted 12 months ago. It’s always great to see a business improve its prospects.
Key Takeaways from Best Buy’s Q2 Results
We enjoyed seeing Best Buy exceed analysts’ EPS expectations this quarter. We were also glad its full-year earnings guidance exceeded Wall Street’s estimates. Overall, this quarter had some key positives. The stock traded up 8.5% to $95.29 immediately following the results.
So should you invest in Best Buy right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
