9:05 AM, May 23, 2019 — Electronics retailer Best Buy (BBY) reported better-than-expected results for its fiscal first quarter, while the incoming chief executive said guidance for the year was reiterated as it balances the strong outcome with the increase in Chinese import tariffs.
Earnings rose to $1.02 a share on a non-GAAP basis from $0.82 a share previously, beating the consensus on Capital IQ for $0.87 a share. Revenue in the three months ended May 4 was slightly stronger year-on-year, hitting $9.14 billion from $9.11 billion. That was about in line with analysts’ expectations.
Enterprise comparable sales rose 1.1% while domestic comps were up 1.3% in the quarter. International comps decreased 1.2%.
Best Buy’s shares were up 2.8% in pre-market trading Thursday, adding to the big-box store’s gains of about 31% so far this year.
“We reported comparable sales growth at the high end of our guidance and delivered better-than-expected profitability,” said Hubert Joly, the company’s chief executive.
Best Buy reiterated its full-year fiscal 2020 outlook for enterprise revenue of $42.9 billion to $43.9 billion, comparable sales growth of 0.5% to 2.5% and non-GAAP earnings of $5.45 to $5.65 a share.
“As we look to the full year, we are reiterating the guidance we provided at the beginning of the year,” said Corie Barry, the company’s chief financial officer who will replace Joly as CEO next month,. “This outlook balances our better-than-expected Q1 earnings, the fact that it is early in the year and our best estimate of the impact associated with the recent increase in tariffs on goods imported from China.”
President Donald Trump earlier this month increased the levies on $200 billion of Chinese goods to 25% from 10% amid worsening trade tensions between the world’s biggest economies.
Best Buy also projected second-quarter revenue of $9.5 billion to $9.6 billion, comp sales growth of 1.5% to 2.5% and EPS of $0.95 to $1. The Capital IQ consensus is for earnings of $0.97 a share, revenue of about $9.5 billion and comp sales growth of 1.7%.
Companies: Best Buy Co., Inc.
Price: 70.40 Price Change: +1.23 Percent Change: +1.78