Best Buy full of surprises in Q2

Best Buy Co. exceeded analysts’ expectations on several fronts in its second quarter.



Profit surged a better-than expected 21% in the quarter ended July 30, rising to $198 million from $164 million in the year-ago period.



Best Buy’s overall revenue totaled $8.5 billion, which was basically flat with last year, but also better than expectations.



Domestic revenue totaled $7.9 billion. Same-store sales in the U.S. rose 0.8%, better than the chain had forecast, which helped offset the loss of revenue from the closings of 12 Best Buy locations and 22 Best Buy Mobile stores.



Online same-store sales jumped 23.7% to $835 million, primarily due to increased traffic, higher average order values and higher conversion rates. Online now accounts for 10.6% of Best Buy’s total domestic revenue versus 8.6% last year.



From a merchandising perspective, the sales gains were primarily in health & wearables, home theater, major appliances and computing, with declines in mobile phones and gaming.



“Our teams delivered a strong second quarter, with better-than-expected revenue and profitability in both our Domestic and International businesses,” said Best Buy chairman and CEO Hubert Joly. “We are encouraged by the quality of our execution, the momentum in our business and the strength of our first half financial results. We are excited by our mission to help customers live their lives and pursue their passions with the help of technology and the growth opportunities this mission creates for us. I want to thank our associates across the company for their focus and work to deliver every day on this mission.”



For the current quarter, Best Buy said it expects its per-share earnings to range from 43 to 47 cents. Analysts expected earnings of 45 cents per share.



The company said it expects revenue in the range of $8.8 billion to $8.9 billion for the fiscal third quarter. Analysts expected revenue of $8.77 billion.