Best Buy Reports Better-Than-Expected Q1 Earnings
Fiscal year 2020 got off to a really good start for the largest big box consumer electronics retailer in the U.S. Best Buy, the number-two overall CE retailer on Dealerscope’s Top 101 list, reported comparable sales increase of 1.1 percent during the first 13 weeks of its new year, which outpaced the estimated increase of 0.9 percent.
Domestic growth for Best Buy was mainly attributed to strong comparable sales increases in appliances and the retailer’s performance on the ecommerce side of things. With appliances, Best Buy saw its comparable sales rise 10.5 percent during the quarter, compared to last year. Online revenue for the retailer rose 14.5 percent to $1.31 billion during Q1 and accounted for 15.4 percent of its total domestic revenue. Additionally, Best Buy realized strong comparable sales from GreatCall, Inc., which the retailer acquired a little over six months ago.
Overall, domestic revenue rose 0.8 percent to $8.48 billion, while international revenue dropped 5.2 percent to $661 million.
Looking ahead, Best Buy offered full-year guidance of $43.9 billion in revenue, which is slightly higher than analysts’ expectations of $43.6 billion. Additionally, the retailer hinted at the potential impact of tariffs on their financial performance.
“We are pleased with our Q1 performance. As we look to the full year, we are reiterating the guidance we provided at the beginning of the year,” incoming CEO Corie Barry said in a statement. “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. Specifically, I am referring to the increase in tariffs from 10 percent to 25 percent on the products on the $200 billion List 3 that originally went into effect last September.”
Best Buy’s stock was up nearly 3 percent in premarket trading following Thursday morning’s earnings report.
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