BEST BUY CRUSHES ESTIMATES; LET THE GOOD TIMES ROLL

My son works at Best Buy in one of the highest grossing stores in America. He’s been telling me how good sales were, tracking ahead by 10% over last year. These numbers are, without question, the best barometer for the consumer that can be used as a short term catalyst to buy stocks like FIT, GPRO and even WDC.

• Reports Q2 (Jul) earnings of $0.57 per share, excluding non-recurring items, $0.14 better than the Capital IQ Consensus of $0.43; revenues rose 0.1% year/year to $8.53 bln vs the $8.39 bln Capital IQ Consensus.
• Comps +0.8% vs. flat guidance.
• Domestic revenue of $7.9 billion increased 0.1% versus last year driven by comparable sales growth of 0.8%, partially offset by the loss of revenue from 12 large format and 22 Best Buy Mobile store closures. Industry revenue in the NPD-tracked categories declined 3.2%.
• From a merchandising perspective, comparable sales growth in health & wearables, home theater, major appliances and computing was partially offset by declines in mobile phones and gaming.
• Domestic online revenue of $835 million increased 23.7% on a comparable basis primarily due to increased traffic, higher average order values and higher conversion rates. As a percentage of total Domestic revenue, online revenue increased 200 basis points to 10.6% versus 8.6% last year.
• Co issues guidance for Q3, sees EPS of $0.43-0.47, excluding non-recurring items, vs. $0.45 Capital IQ Consensus Estimate; sees Q3 revs of $8.8-8.9 bln vs. $8.77 bln Capital IQ Consensus; comps +1%.
• “As it relates to our full year financial outlook, we are reaffirming our expectation of approximately flat revenue and raising our full year non-GAAP operating income3 outlook. We continue to expect the slight revenue decline in the first half to be offset by slight growth in the back half and in light of our first half performance, we are now expecting a full year non-GAAP operating income growth rate in the low-single digits versus our previous expectation of approximately flat. This includes lapping the significant periodic profit sharing benefits from our services plan portfolio that we earned in fiscal 2016. As we discussed on our previous earnings calls, our full year outlook assumes (1) a relatively better mobile cycle; (2) a trend in the NPD-tracked categories consistent with the last two quarters; and (3) delivering our cost reduction and gross profit optimization initiatives.”

Boolish.