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Why Best Buy Stock Is Rising Today

By Anders Bylund – Aug 24, 2021 at 3:09PM

Key Points

  • The home goods and electronics retailer posted solid second-quarter results.
  • Best Buy looks ready to tackle the incoming holiday shopping season.

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Solid second-quarter results indicate that the retailer is prepared to handle the holiday rush.

What happened

Shares of Best Buy (BBY -1.41%) jumped as much as 10.2% higher on Tuesday, boosted by a strong second-quarter earnings report.

So what

Best Buy's sales increased 20% year over year, landing at $11.9 billion. Adjusted earnings jumped from $1.71 to $2.98 per share over the same time frame. Your average analyst would have settled for earnings near $1.85 per share on top-line revenue in the neighborhood of $11.5 billion.

Management also set optimistic revenue targets for the third quarter and full year, encouraged by improving business trends.

A person is shopping for electronics in a busy store.

Image source: Getty Images.

Now what

On the earnings call, Best Buy CEO Corie Barry noted that many product categories are coming back from a difficult supply situation.

"Except for some pockets in appliances and home theater, we do not believe it materially limited our overall sales growth," Barry said.

The retail giant pulled every available lever to stock up on products in limited supply ahead of the holiday shopping season. Consumer demand is generally strong thanks to improving employment figures and a helpful government stimulus program. Planning ahead for the holidays should let Best Buy deliver hefty sales when it matters most.

Having climbed 28% above the 52-week lows of March, Best Buy's stock is now hovering just below all-time highs again. This solid report gave bullish investors a fresh jolt of energy.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Best Buy Stock Quote
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BBY
$81.23 (-1.41%) $-1.16

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