We got a preview of Best Buy's
Aided by a 4.3% increase in same-store sales and the expansion of 75 new units over the past year, second-quarter revenues are expected to rise 13% to $6.07 billion. Sales in the international segment jumped 18% to $570 million, helped in part by favorable currency translation. Though comps at Best Buy outpaced the 3.0% gain posted by RadioShack
The marginal slowdown was not completely unexpected; last year's brisk second quarter was driven by federal tax refunds and the introduction of "Reward Zone," a customer loyalty initiative, both of which created difficult year-over-year comparisons.
Best Buy reported broad strength in several product categories, most notably consumer electronics, which posted "high single-digit" same-store sales gains, fueled by strong demand for digital televisions and digital cameras. Home office products such as MP3 players, notebook computers, and cellular phones also performed well. If this list sounds familiar, it might be because the exact same products were singled out as standout performers last quarter.
Though shoppers were interested in major appliances, the overall appliance segment saw the worst performance, with flat comps for the quarter. The company reported the same lackluster sales of air conditioners that recently sank Rex Stores' second quarter. The appliance business, which constitutes just 6% of Best Buy's revenues, has been dropped altogether by rival Circuit City
Best Buy has not yet released guidance but did say that last year's second-half same-store sales gains of 8.6% and 9.7% are expected to improve by 3%-5%. Analysts are looking for full-year earnings of $2.90, which would represent a 19% gain over the $2.44 earned last year. Best Buy's sustained growth has paved the way for recent stock buybacks and dividend increases and is only one of the reasons why it is a Motley Fool Stock Advisor pick.
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Fool contributor Nathan Slaughter would love to have a big-screen plasma television in time for football season but decided that paying the mortgage instead might be a better idea. He owns none of the companies mentioned.