Best Buy (BBY 60.30, -2.17) has given up 3.5% in pre-market despite beating second quarter expectations and raising its guidance. Today's slip comes after the stock has climbed nearly 25.0% since the company's last earnings release on May 25 versus a 1.7% gain in the S&P 500.
The electronics retailer reported above-consensus second quarter earnings of $0.69 per share on a 4.8% year-over-year increase in revenue to $8.94 billion, which also exceeded estimates.
Enterprise comparable sales grew 5.4% year-over-year, well ahead of guidance for growth between 1.5% and 2.5%. Domestic comparable sales also increased 5.4% year-over-year while International comparable sales grew 4.7%.
Best Buy's domestic segment generated sales growth of 4.9% to $8.27 million while International sales grew 3.7% to $668 million.
Domestically, demand for technology products drove the overall comparable sales growth rate. Sales growth in computing, wearables, smart home, mobile phones, and appliances was partially offset by a decline in tablet sales. Domestic gross margin was unchanged year-over-year at 24.0%.
In the International segment, revenue increased thanks to comparable sales growth in Canada and Mexico. International gross margin declined to 25.1% from 25.9% one year ago.
Looking ahead, Best Buy expects that third quarter earnings will be between $0.75 and $0.80 per share while revenue is expected between $9.30 billion and $9.40 billion. The company's guidance range is ahead of market expectations. For the full year, the company expects revenue growth of as much as 4.0% to $40.98 billion. This is an improvement from previous guidance that called for top-line growth of 2.5%. Non-GAAP operating income is expected to increase between 4.0% and 9.0%, up from a previous outlook for growth between 3.5% and 8.5%.