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Best Buy shares rise on earnings beat, retailer says consumers are upgrading tech to work at home

An employee brings a television to a customer’s car at a Best Buy store in Orlando, Florida.
Paul Hennessy | SOPA Images | LightRocket | Getty Images

Best Buy said Tuesday fiscal second-quarter sales rose nearly 20% as consumers upgraded devices and equipment and permanently embraced habits formed over the past year — from hybrid work to streaming TV shows.

Shares were up 4% in premarket trading.

The consumer electronics retailer raised its outlook for the second half of the fiscal year. It now expects same-store sales to range from flat to down 3% in the second half of the fiscal year versus a year ago. It previously anticipated a high single-digit decline.

“There has been a dramatic and structural increase in the need for technology,” CEO Corie Barry said in a press release.

Due to the pandemic, she said the retailer now serves “a much larger install base of consumer electronics with customers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect permanent life changes.”

She said the company’s sales also benefited from strong consumer spending, government stimulus and higher wages and levels of savings.

Here’s what the company did for its fiscal second quarter ended July 31 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $2.98 adjusted vs. $1.85 expected
  • Revenue: $11.85 billion vs. $11.49 billion expected

Best Buy’s second-quarter net income rose to $734 million, or $2.90 per share, up from $432 million, or $1.65 per share, a year earlier.

Excluding items, it earned $2.98 per share, higher than the $1.85 per share expected by analysts surveyed by Refinitiv.

Net sales rose to $11.85 billion from $9.91 billion a year earlier, outpacing estimates of $11.49 billion.

Sales online and at stores open at least 14 months, a key metric known as same-store sales, grew by 20% versus the year-ago period. That was higher than the 18.1% growth that analysts expected in a StreetAccount survey.

Shares closed Monday at $112.16, bringing the company’s market value to $28.09 billion. As of Monday’s close, Best Buy shares are up about 12% this year.

This story is developing. Please check back for updates.

Read the company’s press release here.