Best Buy faces tough competition from e-commerce players
like Amazon (NYSE: AMZN) and the company has been seeing a declining trend in comparable
sales. This trend can be expected to continue in the second quarter. The
company is also likely to see impacts from the US-China trade war and the
resultant tariffs.
However, the company’s ongoing initiatives to drive growth along with its cost-saving measures are likely to benefit the top and bottom line results. On the flip side, costs related to these investments could take a toll on margins.
Also see: Best Buy Q1 2020 Earnings Report
ADVERTISEMENT
For the second quarter of 2020, Best Buy
has guided for adjusted EPS of $0.95-1.00. Enterprise revenue is expected to be
$9.5 billion to $9.6 billion and enterprise comparable sales growth is projected
to be 1.5-2.5%.
For fiscal year 2020, the retailer expects adjusted EPS of $5.45-5.65,
Enterprise revenue of $42.9 billion to $43.9 billion and Enterprise comparable
sales growth of 0.5% to 2.5%.
In the first quarter of 2020, Best Buy beat revenue and earnings estimates. Revenue remained flat year-over-year at $9.14 billion while adjusted EPS grew 24% to $1.02. Enterprise comparable sales grew 1.1%.
Shares of Best Buy have gained 30% year-to-date. The stock was up 0.60% in morning hours on Monday.