Best BuyBest Buy (BBY), the largest electronics retailer in the U.S., reported fiscal second-quarter earnings grew 61% despite a decline in consumer traffic. However, those who came spent more per purchase and bought cell phones, appliances and laptops. The results took many by surprise, especially with the company also boosting guidance, sending shares up 8% in premarket trading.

The retailer reported net earnings of $254 million, or 60 cents per share, for its 2011 fiscal second quarter ended Aug. 28, 2010, compared with $158 million, or 37 cents per share, for the prior-year period. Results handily beat analysts expectations of 46 cents per share.

"We're still in the early stages of our Connected World strategy, but this quarter's results give me continued confidence that we're making progress in driving value through growth in connections for our customers, vendors and shareholders," said CEO Brian Dunn. But Dunn added the quarter was indeed marked "with constrained consumer spending."

A Revenue Forecast of $52 Billion

Best Buy's revenue increased 3% to $11.3 billion, compared with revenue of $11 billion for the second fiscal quarter of 2010. The increase reflected the impact of net new stores in the past 12 months and a 0.1% decline in comparable-store sales.

Not only did results beat estimates, but the retailer also increased its full year EPS guidance by 10 cents to a range of $3.55 to $3.70 to reflect impact of share repurchases completed in the first fiscal half. Analysts expect $3.43 per share. Best Buy also expects revenue of approximately $52 billion, a year-over-year increase of 5%, and full year same-store sale increase of 1% to 2%.

In the U.S., revenue totaled $8.4 billion, an increase of 2% versus the prior-year period, driven by the addition of net new stores, partially offset by a comparable-store sales decline of 1%. The comparable-store sales results were driven primarily by a decline in customer traffic, partially offset by an increase in average ticket. Americans bought more mobile phones, appliances and mobile computers, including tablet computers such as Apple's (AAPL) iPad. But they bought less TVs and entertainment hardware and software.

Internationally, revenue totaled $2.9 billion, an increase of 6% versus the prior-year period, driven primarily by a 4% increase in comparable-store sales and the impact of net new stores.

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61% yeah.

September 14 2010 at 9:57 AM Report abuse rate up rate down Reply

The reason fot the increase is because Best Buy is right on border of breaking cosumer laws due to false advertisements. Be sure you understand thier policy on returning or replacing defective merchandise. We purchased a faulty gps from them and they refuse to trade item for same unit one that will work. In order to get repaired or replaced the customer has to deal with manufacture of items. This includes all shipping cost etc. All electronics etc are only covered by manufacture. Best Buy will not replace defective items they sell. Also be sure you keep your reciept for entire warranty period or manufacture wont stand behind warranty either. I will pay a little more for products at other electronic stores in the future because have never had a problem with them replacing a defective product. Also we tell everyone we know about this deceptive practice going on. Iam willing to bet as the public learns more of this deception they will fall just as other giants that decided customer service was the least important part of thier companies.

September 14 2010 at 9:32 AM Report abuse rate up rate down Reply
1 reply to Jimmy's comment

Try reward zone! it's free and files your receipts in best buys system.

November 26 2010 at 8:47 AM Report abuse rate up rate down Reply