Best Buy on Tuesday reported far better than expected earnings for the second quarter, thanks to a surge in net profit of $266 million, or 77 cents a share.
The U.S. consumer electronics retailer reported second quarter revenue of $9.30 billion, down from $9.34 billion on the same quarter a year ago. Non-GAAP earnings were 32 cents a share.
Wall Street was expecting 12 cents per share on revenue of $9.13 billion — so the company beat expectations on both accounts.
It comes only a few months after the company pulled out of the U.K. and European markets. At its first quarter earnings call, the company beat estimates and saw a near-instantaneous recovery.
Best Buy said it completed the sale of its 50 percent stake in Best Buy Europe and received $526 million in net cash in closing, and $123 million in cash proceeds from the sale of shares. Therefore, it ended the quarter with $1.91 billion in cash and equivalents, a 180 percent increase from the year-ago quarter.
Best Buy issued a second quarter dividend of 17 cents per common share outstanding, or $58 million in total.
Best Buy president and chief executive Hubert Joly highlighted some key points for the quarter, notably declining store sales and falling operating margins. "While we are clear there is much more work ahead, we have made measurable progress," he said in prepared remarks, noting near flat store sales and better than expected earnings in the past three consecutive quarters.
As expected, Domestic comparable store sales were down 0.4 percent. But this was driven by short-term disruptions caused by the retail deployment of the Samsung Experience Shops, Windows Stores, and floor space optimization, as well as our continuing rationalization of non-core businesses. Excluding these impacts, Domestic comparable store sales were flat to slightly positive for the quarter. In addition, we delivered a better-than-expected non-GAAP diluted [earnings per share] of 32 cents.
Profit aside, revenue took a knock, according to the balance sheet. Best Buy said comparable store sales were hit by short-term disruptions caused by the retail deployment of the Samsung Experience Shops, Windows Stores, and floor space optimization. The company also said it was continuing its "rationalization" of non-core businesses.
Shares in the company were up by more than 15 percent in pre-market trading on the New York Stock Exchange on Tuesday morning.