Best Buy Group literally smashed market expectations in the first quarter of its current fiscal year. This period runs from February 1 to April 30, 2021. Its business in that quarter had generated a strong growth in profit at $595 million compared to $159 million in the first quarter of 2020. Best Buy Group kept that same pace in the second quarter.
On July 31, Best Buy closed the second quarter of its fiscal year 2022 with 20% comparable sales growth. This sales performance can be explained by consumers upgrading their equipment and appliances. They continue to adopt the habits they have acquired over the past year from hybrid working to streaming TV.
Operating income increased 40% over the prior year. Best Buy's stores had been restricted to curbside service for more than half the quarter, however. At the same time, the group honoured in-store appointments. Sales were up 24% from their level two years earlier (Q2/2020). Operating income more than doubled in the second quarter.
As soon as these record financial results were released, the company's stock rose 8.32% to $121.49.
Throughout the quarter, consumer demand for technology products and services increased sharply as in Q1 FY2022. Indeed, they continue to take advantage of technology solutions to solve their problems. The group understands this reality and offers solutions that allow them to entertain, work, learn, connect at home and even cook.
As a result, Best Buy reported net income of $734 million in Q2 2022 compared to $432 million a year ago. This equates to adjusted earnings per share of $2.98 versus $1.65 in Q2/2021 excluding special items. The consensus was for adjusted EPS of $1.85 for that period.
The company reported revenue of $11.85 billion on the back of strong sales growth, compared with the consensus expectation of $11.49 billion. It was $9.91 billion in Q2/2021.
The electronic retailer revised its outlook for the second half of fiscal 2022. For the third fiscal quarter of 2022 alone, Best Buy now expects sales in the range of $11.4 billion to $11.6 billion. On the other hand, the company expects a decline in same-store sales. The drop is expected to be between 1% and 3%.
Best Buy also expects a 30 basis point (non-GAAP) drop in gross profit rate compared to Q3/2020.
In contrast, Best Buy's expected sales for fiscal 2022 are in the range of $51 billion to $52 billion. Comparable sales growth is expected to be 9% to 11% for the full 12 months (3% to 6% initially).