Best Buy Posts 233% Earnings Growth in Q1, Raises FY22 Guidance

The consumer electronics retailer Best Buy Co. (BBY) posted strong fiscal first-quarter 2022 results. Following the results, shares rose 1% on May 27 to close at $118.14.

Adjusted earnings in Q1 grew substantially by 233% to $2.23 per share on a year-over-year basis and came in above the consensus estimate of $1.37 per share. 

Total sales of $11.64 billion climbed 35.9% from the year-ago period. Analysts were expecting revenues of $10.34 billion. Segment-wise, domestic revenue increased 37% year-over-year, while international revenues increased 23% from the year-ago period.

Markedly, Enterprise comparable sales increased 37.2%.

Best Buy CFO Matt Bilunas said, “The sales momentum is continuing into Q2 and we are raising our annual comparable sales growth outlook. As we think about the back half of this year, we expect shopping behavior will evolve as customers are able to spend more time on activities like eating out, traveling and other events. It is difficult to know exactly how that impacts our business, especially as we lap particularly strong sales in the back half of last year. Therefore, at this time, we are leaving our original FY22 back-half sales assumptions unchanged.” (See Best Buy stock analysis on TipRanks)

Best Buy raised its guidance for full-year 2022. The company now expects enterprise comparable sales growth to be in the range of 3% to 6% versus its prior outlook of -2% to 1%.

For the fiscal second quarter, the company expects enterprise comparable sales growth of approximately 17%.

Following the fiscal Q1 earnings release, Oppenheimer analyst Brian Nagel assigned the stock a price target of $125 (5.8% upside potential) and a Hold rating.

Nagel said, “Stronger-than-anticipated sales and earnings trends at BBY lately reflect clearly the company capitalizing well upon economic re-opening and an underlying healthy spending backdrop, bolstered by substantial government-funded stimulus.”

The analyst added, “We continue to look very favorably upon BBY’s strategic positioning and will opportunistically look to turn more constructive toward shares as nearer-term concerns pass or are better priced into the equity.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 8 Buys, 5 Holds, and 1 Sell. The average analyst price target of $130.86 implies 8.6% upside potential to current levels. Shares have increased 8.6% over the past six months.

Best Buy scores a 6 of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market averages.

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