Best Buy continues strong financial performance in Q2

For the second quarter in a row, Best Buy beat expectations for revenue, profits, and same-store sales.

The consumer electronics giant reported $11.85 billion in enterprise revenue during the second quarter of fiscal 2022, up 19% from $9.91 billion in the prior-year period. Net income rose 70% to $734 million, or $2.90 per share, up from $432 million, or $1.65 per share, a year earlier. Same-store sales grew 20%.

All of these results exceeded expectations both of Wall Street analysts and Best Buy’s own forecasts. In the first quarter of fiscal 2022, Best Buy also reported better-than-expected results.

As was the case in the first quarter, Best Buy credited continued strong consumer demand for technology to support activities such as working from home and streaming entertainment content as helping to drive its impressive performance. In her official comments, Corie Barry, CEO of Best Buy, suggested this pandemic-driven shift in how consumers live and work is to some extent permanent.

“We are reporting record second-quarter results today with comparable sales growth of 20% and operating income growth of 40% compared to last year,” said Barry. “We are lapping an unusual quarter last year as our stores were limited to curbside service or in-store appointments for roughly half the quarter. When we compare to two years ago, our results are also very strong. Compared to the second quarter of fiscal year 2020, revenue is up 24% and our operating income has more than doubled.”

“Customer demand for technology products and services during the quarter remained very strong,” said Barry. “Customers continued to leverage technology to meet their needs, and we are providing solutions that help them work, learn, entertain, cook and connect at home. The demand was also bolstered by the overall strong consumer spending ability, aided by government stimulus, improving wages and high savings levels.”

“Over the longer term, we are fundamentally in a stronger position than we expected just two years ago,” Barry continued. “There has been a dramatic and structural increase in the need for technology. We now serve 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, like hybrid work and streaming entertainment content. Our unique omnichannel assets, including our ability to inspire what is possible across the breadth of consumer electronics products as well as our ability to keep it all working together the way customers want, truly differentiate us going forward in this new landscape.”

Looking ahead, Best Buy is providing the following guidance for the third quarter and full fiscal year 2022:

Third quarter:

• Enterprise revenue of $11.4 billion to $11.6 billion.
• Enterprise same-store sales decline of -1% to -3%.

Full year:

• Enterprise revenue of $51 billion to $52 billion.
• Enterprise same-store sales growth of 9% to 11%, compared to the prior outlook of 3% to 6% growth.
• Enterprise non-GAAP gross profit rate slightly higher than the previous year, compared to the prior outlook of approximately flat to fiscal 2021.