Best Buy (NYSE: BBY) has been a standout stock in an otherwise horrendous year for U.S. retailers in 2017.
Investors were cheered on Tuesday morning when Best Buy reported second-quarter earnings that show the company is still bucking the bearish retail trend.
Consensus analyst estimates for the quarter are called for earnings per share of 63 cents on revenue of $8.7 billion, but BBY beat those forecasts with 69 cents and $8.94 billion. In addition to the top- and bottom-line numbers, investors and analysts are watching same-store sales, which rose 5.4 percent, easily topping the expected 2.2 percent.
Online comparable sales surged 31 percent. In the first quarter, Best Buy reported 22.5 percent growth in online sales.
This week, Jefferies analyst Daniel Binder said Best Buy’s gaming sales likely propelled same-store sales.
“Gaming likely saw a second quarter of comparable store sales growth driven by the portable Nintendo Switch and the 1TB Playstation 4 Slim golf consoles,” Binder writes in a note to clients. “NPD reports that gaming hardware sales were up 7 percent in May, 27 percent in June and 29 percent in July.”
Barclays analyst Matthew McClintock expected positive numbers from Best Buy.
“We are bullish into the quarter as we have seen many positive reads across categories,” McClintock says.
Target Corp. (TGT) reported double-digit second-quarter sales growth in both video game sales and Apple (AAPL) electronic devices. McClintock says both those trends bode well for Best Buy. He also said Best Buy could experience some tailwinds in the second half of the year from Microsoft Corp. (MSFT), which is launching HomeHub, its new smart home initiative, next month.
With Best Buy stock already up more than 45 percent year-to-date, Jefferies is…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
