Best Buy Co., Inc. raised its estimate for second-quarter diluted earnings per share from continuing operations to a new range of U.S. $0.37 to $0.42, compared with analysts' consensus of $0.30 per share. The company's prior guidance, which was originally provided on June 18, was a range of $0.27 to $0.32 per share for the quarter, which ends on Aug. 30, 2003. The company reported earnings from continuing operations of $79 million, or $0.24 per diluted share, for last year's second quarter, which ended on Aug. 31, 2002.
"Strong comparable store sales growth, increasing gross profit rates, and diligent cost controls all are contributing to the higher earnings guidance from continuing operations for the second quarter and for the fiscal year," said Darren Jackson, executive vice president and chief financial officer. "In addition, consumers continue to migrate to higher-margin products, such as digital TVs. The gross profit rate from continuing operations is the largest contributor to the improved outlook. The gross profit rate is expected to increase by at least 70 basis points for the current period, compared with 24.9 percent of revenue in the second quarter of fiscal 2003." The company's prior earnings guidance had contemplated no change in the gross profit rate for the second quarter. Mr. Jackson noted that the company's selling, general, and administrative expense rate is improving, and comparable store sales are still on pace to grow by the mid-single digits for the quarter.
The company is expected to announce its second-quarter sales on Sept. 4, 2003 and its second-quarter earnings on Sept. 17, 2003. Best Buy's quarterly financial results and news releases can be found on the company's Web site, www.BestBuy.com.
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