Associated Press/Bebeto Matthews
- Best Buy traded as much as 9% lower early Thursday after missing fiscal second-quarter revenue estimates and shifting its yearly revenue forecast lower than anticipated.
- The tech retailer cited tariffs on Chinese goods and "general uncertainty" around consumer spending behavior for the lowered guidance.
- Best Buy topped analysts' profit expectations for the quarter. CEO Corie Barry attributed the improved margins to "gross profit rate expansion" and cost-cutting.
- Watch Best Buy trade live here.
Best Buy sank as much as 9% in early Thursday trading after missing revenue estimates and changing its yearly guidance to reflect higher tariffs on Chinese goods and "general uncertainty" related to buying behavior.
The tech retailer bested expectations for its fiscal second-quarter profits, but missed estimates for quarterly revenue and sales growth. Its updated third-quarter revenue forecast also fell under analyst expectations.
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Here are the key numbers:
Adjusted earnings per share: $1.08, versus the $0.99 estimate
Revenue: $9.54 billion, versus the $9.56 billion estimate
Enterprise comparable sales growth: 1.6%, versus the 2.2% estimate.
3Q revenue forecast: $9.65 billion to $9.75 billion, versus the $9.78 billion estimate
The latest report is the first released under Best Buy's new CEO, Corie Barry. She replaced Hubert Joly in April. Joly's seven-year stint as chief executive saw Best Buy's stock jump more than 240%.
Barry attributed the boosted profits to "gross profit rate expansion" and improved cost-cutting. Declines in Best Buy's gaming and home theater businesses outweighed sales growth in its tablets, headphones, appliances, and services segments.
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The retailer announced an expansion of its partnership with Apple in July. The iPhone-maker said its customers can have their products repaired at all of Best Buy's nearly 1,000 US stores without breaking Apple's warranty policy. Only certain Best Buy locations offered the service prior to the expansion.
Best Buy stock closed Wednesday at $69 per share, up roughly 30% year-to-date.
The tech retailer has nine "buy" ratings, 16 "hold" ratings, and one "sell" rating from analysts, with a consensus price target of $74.75, according to Bloomberg data.
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