BBY

Best Buy was the highlight of the last set of Q2 earnings reports this week. The American consumer electronics shop, which is shipping thousands of items like cell phones and other gadgets, computers, appliances, video games etc. beat consensus on both revenue and profit.

The company’s EPS (equity per share) of $1.22 on sales of $9.58 billion was better than estimates of $1.07 per share on sales of $9.52 billion on average. Appropriate numbers were also 6.1% and 1.15% better than in the previous quarter, even though 20.8% and 7.3% lower YoY. The segment is still under pressure due to clearly reduced global demand on non-essential goods, yet the company's marginality is growing, as it seemingly managed to balance costs and its pricing policy. Gross margin level was at 23.2%, being 60 basis points above the expert pool forecasts. For the financial year of 2024, Best Buy sees its EPS of $6.20 on sales of $44.15 billion, against previous consensus for earnings of $6.08 on sales of $44.3 billion.

Deeper but reasonable discounts encouraged consumers to shop, giving results that are "at the high-end of the outlook" the company shared in May, said Corie Barry, Best Buy CEO, adding that the financial side of its business continued to "demonstrate our strong operational execution as we balance our reaction to the current industry sales pressure with our ongoing strategic investments”. Best Buy shares became one of the best buy cases of the week, as the stock initially jumped by 5.6% on August 29 to hold a gain of 3.87% before the closing bell.

Since Best Buy stocks have been in a downtrend since November 2021 and then rebounded sharply in November 2022, and are moving sideways at lower levels till now, a moderate bounce in an attempt to test its winter peaks may probably be called a baseline scenario for September.