Best Buy Co Inc Reports Q2 FY25 Financial Results

Intellectia.AI2024-08-29

Illustration by Intellectia.AI

Best Buy Co., Inc. Reports Q2 FY25 Financial Results

Best Buy Co., Inc. (NYSE:BBY) has announced its financial results for the second quarter of fiscal year 2025, which ended on August 3, 2024.

Key Financial Metrics

Metric	Q2 FY25	Q2 FY24	YoY Change	Consensus Estimates	Q1 FY25	QoQ Change
Total Revenue	$9.29B	N/A	N/A	$9.24B	N/A	N/A
GAAP Diluted EPS	$1.34	N/A	+7%	N/A	N/A	N/A
Non-GAAP Diluted EPS	$1.34	$1.22	+10%	$1.16	N/A	N/A

Interpretation Best Buy delivered better-than-expected sales and profitability. Total revenue reached $9.29 billion, slightly above the Wall Street consensus estimate of $9.24 billion. Both GAAP and non-GAAP diluted EPS exceeded forecasts, with Non-GAAP EPS surging by 10% year-over-year to $1.34, outperforming the estimate of $1.16.

Revenue Performance by Segments

Segment	Q2 FY25 Revenue	YoY Change	Comments
Domestic	$8.62B	-3.0%	Decline primarily due to appliances and gaming; growth in tablets and computing
International	$665M	-4.0%	Negative impact from foreign exchange rates; comparable sales decline of 1.8%

Interpretation Domestic revenue decreased by 3.0% year-over-year. This decline was largely driven by reduced sales in appliances and gaming, offset by gains in the tablets, computing, and services categories. International revenues also saw a 4.0% drop, influenced by adverse foreign exchange rates.

Key Developments and Operational Highlights

Comparable Sales : Declined by 2.3%.
Online Revenue : Domestic online revenue for Q2 FY25 was $2.72 billion, accounting for 31.5% of Domestic revenue.
Gross Profit Rate : Domestic gross profit rate was 23.5%, up from 23.1% last year.
SG&A Expenses : Domestic SG&A on a non-GAAP basis decreased to $1.66 billion.
International Gross Profit Rate : Decreased to 23.9%, mainly due to lower product margins and higher supply chain costs.

Officer Comments

Corie Barry, CEO : "We are reporting better-than-expected sales and profitability results for the second quarter. Strong results in our Domestic tablet and computing categories with comparable sales growth of 6% versus last year. We're focused on enhancing customer experience and expanding our non-GAAP operating income rate."

Matt Bilunas, CFO : "As we look to the back half of the year, we expect our industry to continue to show increasing stabilization. Updating our annual comparable sales guidance to a decline of 1.5% to 3.0% and raising our non-GAAP diluted EPS guidance to $6.10 to $6.35."

Dividends and Share Repurchase Programs

Dividends : Announced a quarterly cash dividend of $0.94 per share, payable on October 10, 2024.
Share Repurchases : Returned $98 million through share repurchases in Q2 FY25, totaling $553 million year-to-date in FY25. Expected share repurchases for FY25 approximated at $500 million.

Forward Guidance

Revenue : Updated to $41.3 billion - $41.9 billion.
Comparable Sales : Adjusted to decline between 1.5% and 3.0%.
Non-GAAP Diluted EPS : Raised to $6.10 - $6.35.
Capital Expenditures : Approximately $750 million, unchanged.

Stock Price Movement

Following the earnings release, Best Buy's stock observed an increase of 1.37%.

Summary Best Buy's Q2 FY25 results were strong, bolstered by robust performance in select categories despite some declines. The company has raised its full-year EPS guidance, indicating confidence in ongoing operational strategies and market positioning.