Best Buy forecast estimate-beating Q2 sales and profit on Thursday as more and more customers opted for the electronic retailer’s tech support services and continue shopping on its website and app.
The company clocked in better-than-expected profit in Q1 but shied away from disclosing full-year estimates keeping in mind the potential impact of U.S-China dispute, especially the latest imposition of tariffs on $200 billion worth Chinese goods.
Post the announcement, shares of the company rose 2.1% in premarket trade. Key highlights of the Q1 include 40 points gross profit expansion to 23.7%, 14.5% rise of domestic online sales to $1.31 billion accounting for 15.4% of total quarterly revenue, 1.1% same-store sales rise versus an expected 0.9% increase, earnings per share at $1.02 versus estimated 86 cents per share. Further, the company indicated that it expects an adjusted profit for Q2 to be in the range of $0.95 to $1 per share, and total marginal revenue rise to $9.14 billion in line with analysts’ expectations.
The tech support business has been a signature element of outgoing Chief Executive Officer Hubert Joly’s turnaround strategy that led Best Buy out of years of falling same-store sales.
An increasing share of Best Buy’s sales also comes from online, where it has been investing more to boost delivery coupled with its “click and collect” business that helps shoppers buy products online and collect them later from the stores.