Best Buy Co. (NYSE:BBY)
On Tuesday morning before the market opened, Best Buy announced second-quarter earnings that topped analyst expectations but issued lower guidance than expected, which is weighing on share prices in the premarket session. The company announced earnings of 70 cents per share on $8.44 billion in revenues while analyst were looking for 35 cents on $8.29 billion in revenues. BBY also announced same-store sales that were flat and ahead of the guidance at negative 1-2%. Guidance for for full year remains flat with EPS for second quarter ranging between 38 and 42 cents while analyst were looking for 50 cents. This wasn’t a terrible earnings release as numbers were actually better than expected aside from Q2 guidance so we could see this get a bounce at some point today. Currently analyst have an average price target of $34.04.
Looking at the chart you will see that shares are looking to open lower than yesterdays close of $33 with premarket lows coming in at $31.15, a 5.6% decrease in price. We should see some support come in at $31 and $30 with ascending support at 29.15 while resistance will be met at $32 and $32.42, where the 200-day moving average currently sits. Look for above normal volatility on this name as volume will pick up with more traders looking to take advantage of the big price movement.
CEO Comments
Our teams delivered a strong first quarter, with better-than-expected revenue, improved profitability and progress against our fiscal 2017 initiatives,” said Best Buy Chairman and CEO Hubert Joly. “We are reaffirming our previously provided full year financial outlook which includes approximately flat revenue and non-GAAP operating income, with non-GAAP EPS growth driven by share repurchases. Although we are reporting better-than-expected results today, we are not raising our full year outlook as the first quarter represents less than 15% of full year earnings and at this stage we have no new material information as it relates to product launches throughout the year.
Joly continued, “In our Domestic business, we are reporting essentially flat comparable sales versus guidance of a 1% to 2% decline driven by strong year-over-year sales growth in health & wearables, home theater and appliances offset by continued softness in mobile phones and tablets. Contributing to these better-than-expected results was the strong performance in our online channel, which grew 24% in the quarter.
BBY Profile
Best Buy is a provider of technology products, services and solutions. The Company offers products and services to the customers visiting its stores, engaging with Geek Squad agents or using its Websites or mobile applications. It operates through two segments: Domestic and International. The Domestic segment consists of the operations in all states, districts and territories of the United States, under various brand names, including Best Buy, bestbuy.com, Best Buy Mobile, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theater, and Pacific Kitchen and Home. The International segment consists of all operations in Canada and Mexico under the brand names, Best Buy, bestbuy.com.ca, bestbuy.com.mx, Best Buy Express, Best Buy Mobile and Geek Squad. It Domestic and International segments have offerings in over six categories, such as consumer electronics, computing and mobile phones, entertainment, appliances, services and other.
By Sean V