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Best Buy beats Q2 views, expands Apple Watch sales

Best Buy (NYSE:BBY) stock jumped Tuesday after the consumer electronics retailer reported much better than expected sales and earnings for its fiscal second quarter ended Aug. 2. It also announced a deeper partnership with Apple (NASDAQ:AAPL) to sell Apple Watch and other products.

Best Buy was up 16%, near 34, in midday trading in the stock market today after falling to a 14-month low below 33 early during Monday's stock market route.

The Richfield, Minn.-based company earned 49 cents a share excluding items, up 11% year over year, on sales of $8.53 billion, down 4%. Analysts polled by Thomson Reuters expected Best Buy to earn 34 cents a share minus items on sales of $8.29 billion.

Best Buy has posted five straight quarters of year-over-year increases in earnings per share. But revenue has fallen for three consecutive quarters as Best Buy retreats from international markets such as Canada and China.

U.S. same-store sales rose 3.8%, thanks to continued strong sales of major appliances, large-screen televisions, mobile phones, and health and fitness devices. Tablets were a notable declining category.

Analysts had expected same-store sales growth of just 1.3%.

UBS analyst Michael Lasser said the same-store sales growth was notable because sales across the consumer electronics industry declined 1.9% during Q2.

For the current quarter, Best Buy expects U.S. sales to be flat or grow by a low single-digit percentage rate. The guidance...


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