Same-store sales in its domestic stores rose 3.2% in the quarter, while online sales surged 21.6% compared to last year's quarter. Best Buy's net sales rose slightly to $9.38 billion, above consensus expectations of net revenue of $9.11 billion.
Best Buy reported adjusted earnings from continuing operations of 32 cents a share compared to 18 cents a year earlier and above consensus expectations for earnings of 25 cents a share. The company was able to reduce expenses by another $65 million in the quarter, bringing the total savings under its Renew Blue cost savings initiative to $965 million since it began nearly two years ago.
Shares of Best Buy were up 7.3% to $38.13 in mid-Thursday trading. Here's what analysts said.
Matthew Fassler, Goldman Sachs (Neutral, $35 PT)
"BBY generated very strong 3Q sales, and better-than-expected EPS, reflecting solid sales in core TV and PC categories. EPS of $0.32 vs. $0.18 beat our $0.29 and the Street's $0.25. Domestic SSS rose 3.2%, well ahead of our -1.3% forecast - which we had just raised - and total revenue tracked more than 3% ahead of GS/consensus. The company does not issue comprehensive guidance, but spoke to "near-flat" SSS growth - we are at 0.8% / Street at -1.1% - and operating margin up ~50 bps YTY - we stand at +~80 bps, and the Street at ~+90 bps - with some pressure from higher incentive compensation.
We expect a favorable response to this print. SSS turned positive a quarter ahead of our forecast, and in the absence of sales growth for wireless, which should improve as supply constraints abate. We believe expectations for earnings were high, but that a positive comp was not embedded in expectations, let alone one of +3%. Upside to estimates looks modest given higher SG&A, but we interpret this as higher earnings quality."