Best Buy Co Inc (ticker: BBY) stock jumped more than 14 percent after the technology retailer reported a big first-quarter earnings beat on the strength of surprise comparable-store sales growth.
In an extremely weak quarter for U.S. retail stocks, Best Buy’s big numbers suggest the company’s attempt to fend off e-commerce competition from Amazon.com, Inc (AMZN) and others is working.
Best Buy reported earnings per share of 60 cents, beating consensus analyst expectations of 40 cents. Revenue of $8.53 billion also topped analyst expectations of $8.28 billion.
However, one of the most pleasantly surprising numbers for Best Buy investors was the company’s 1.6 percent comparable-store sales increase. Wall Street had been expecting a 1.5 percent decline. Best Buy also issued guidance calling for comparable-store sales to continue to improve by 1.5 to 2.5 percent in the second quarter.
“Compared to our expectations going into the quarter, our revenue was higher due to strong performance in gaming, a better-than-expected result in mobile and the improvement of overall sales trends due to the arrival of delayed federal tax refund checks,” CEO Hubert Joly says.
Gaming sales were likely boosted by the March launch of the Nintendo Co. Switch console. Last week, retailer Target Corp. (TGT) said its first-quarter electronics sales “leapt forward” thanks to the Switch.
Best Buy’s online sales growth is particularly encouraging for bulls. While overall sales were up just 1 percent in the first quarter, domestic online sales jumped 22.5 percent.
Looking ahead to the second quarter, Best Buy expects further positive momentum. The company is guiding for second-quarter EPS of 57 to 62 cents on revenue of $8.6 billion to $8.7 billion.
“We expect…
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