Best Buy Co Inc (NYSE:BBY) raised its annual sales and profit forecast on Thursday after posting second-quarter results that topped Wall Street expectations, even as shares fell 5%.
The consumer electronics retailer reported revenue of $9.8 billion for the quarter, above analyst estimates of $9.59 billion and up 4% from a year earlier. Adjusted earnings per share came in at $1.47, compared with estimates of $1.38 and up 15% year-over-year.
Comparable sales rose 4.1%, an increase of 160 basis points from the prior year, while operating margin expanded to 4.3%, also up 160 basis points.
For the full fiscal year, Best Buy now expects revenue of $42.3 billion to $42.8 billion, above the $42 billion analysts had projected. The company raised its adjusted EPS outlook to a range of $6.70 to $6.90, from a prior estimate of $6.58.
Comparable sales for the year are now expected to grow between 1.9% and 3%, an increase from the previous guidance range of -1% to 1%. Adjusted operating income rate is forecast at 4.4% to 4.5%, up from 4.3% to 4.4% previously. The adjusted effective income tax rate remains unchanged at 25.5%, and capital expenditures are still expected at approximately $750 million.
For the third quarter, Best Buy guided comparable sales growth of 1% to 3% and an adjusted operating income rate of 4.1% to 4.2%.
Domestic segment net revenue reached $9.1 billion, up 4% from a year earlier, while international net revenue declined 4% to $709 million.