Best Buy (NYSE: BBY) has been a standout stock in an otherwise horrendous year for U.S. retailers in 2017.
Investors were cheered on Tuesday morning when Best Buy reported second-quarter earnings that show the company is still bucking the bearish retail trend.
Consensus analyst estimates for the quarter are called for earnings per share of 63 cents on revenue of $8.7 billion, but BBY beat those forecasts with 69 cents and $8.94 billion. In addition to the top- and bottom-line numbers, investors and analysts are watching same-store sales, which rose 5.4 percent, easily topping the expected 2.2 percent.
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Online comparable sales surged 31 percent. In the first quarter, Best Buy reported 22.5 percent growth in online sales.
This week, Jefferies analyst Daniel Binder said Best Buy’s gaming sales likely propelled same-store sales.
“Gaming likely saw a second quarter of comparable store sales growth driven by the portable Nintendo Switch and the 1TB Playstation 4 Slim golf consoles,” Binder writes in a note to clients. “NPD reports that gaming hardware sales were up 7 percent in May, 27 percent in June and 29 percent in July.”
Barclays analyst Matthew McClintock expected positive numbers from Best Buy.
“We are bullish into the quarter as we have seen many positive reads across categories,” McClintock says.
Target Corp. ( TGT) reported double-digit second-quarter sales growth in both video game sales and Apple ( AAPL) electronic devices. McClintock says both those trends bode well for Best Buy. He also said Best Buy could experience some tailwinds in the second half of the year from Microsoft Corp. ( MSFT), which is launching HomeHub, its new smart home initiative, next month.
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With Best Buy stock already up more than 45 percent year-to-date, Jefferies is cautious on the stock and maintains its “hold” rating. Barclays is more bullish on Best Buy shares with an “overweight” rating and a $65 price target.
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Beat Goes On for Best Buy (BBY) originally appeared on usnews.com
