Best Buy stock rises on mixed earnings beat

Best Buy shares are boosted as the tech retail chain reports a revenue miss while topping adjusted earnings per share expectations.

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JULIE HYMAN: Shares of Best Buy, they are popping it here as the electronics retailer. Its adjusted earnings per share, came in at a buck 15 that beat analysts' estimates, did miss on revenue, saw some steep declines in sales across categories, which you might expect. So it's interesting here, Diane. I guess just the expectations were pretty low going into this.

DIANE KING HALL: So they jumped over the borrowers here--

JULIE HYMAN: Right. Yeah, exactly.

DIANE KING HALL: OK, we just--

JULIE HYMAN: They hopped over.

DIANE KING HALL: Exactly. Exactly. So-- but they're optimistic. Their outlook is improving. They feel like the worst is behind them in terms of the trade away. They-- you say-- they said they're noticing customers doing some trade down. And we did expect for them to suffer in terms of their performance compared to other retailers because consumer electronics, one, we saw this surge during the pandemic that has certainly cooled off, but now they feel like the worst is behind them in terms of sales, but, you know-- so they're getting a little bit of a pickup in action today, but they're down double digits year to date, so, you know--

JULIE HYMAN: And I guess the momentum of the declines is slowing a little bit. In other words, the overall comparable sales this quarter down in the neighborhood of 10%. In this current quarter, it's going to be a drop of 3% to 6%. So it's bad, but it's not as bad.

DIANE KING HALL: Exactly.

JULIE HYMAN: And I guess that along with the earnings beat seems to be [INAUDIBLE]

DIANE KING HALL: Yeah.

JULIE HYMAN: But you see there are some of the individual groups there. Those are the comp sales. Computing and mobile phones down a lot. Consumer electronics down a lot, appliances. Entertainment interestingly to-- interesting to see--

DIANE KING HALL: I was surprised by that number.

JULIE HYMAN: Those comp sales on the rise. Actually, those aren't comps. Those are the overall sales that we're seeing gains, but comps also saw gains in entertainment. So interesting--

DIANE KING HALL: I know. And they're still dealing with inflation pressure as well. So, you know, that will continue to be ahead win clearly for Best Buy.

JULIE HYMAN: Definitely.