Shares of electronics retailer Best Buy (NYSE:BBY) jumped 5.35% in the morning session after the company reported second quarter results that beat analysts' revenue and EPS expectations.
Guidance was more mixed, with full year same-store sales and revenue guidance lowered from the company's previous outlook. However, Best Buy's profitability outlook is better, resulting in a higher full year operating margin guidance compared to previous.
Perhaps the most positive, though, was the CEO's commentary on the demand environment. "...we continue to expect that this year will be the low point in tech demand after two years of sales declines. Next year the consumer electronics industry should see stabilization and possibly growth driven by the natural upgrade and replacement cycles and the normalization of tech innovation."
Overall, this was a mixed quarter for Best Buy, but the commentary is a bright spot. After the initial pop the shares cooled down to $77.35, up 4.41% from previous close.
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What is the market telling us:
Best Buy Co's shares are somewhat volatile and over the last year have had 8 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Best Buy Co is down 3.88% since the beginning of the year, and at $77.35 per share it is trading 15.4% below its 52-week high of $91.42 from February 2023. Investors who bought $1,000 worth of Best Buy Co's shares 5 years ago would now be looking at an investment worth $995.62.
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