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UPDATE 2-Best Buy lifts annual sales forecast after strong 2nd-qtr results

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Aug 29 (Reuters) - Best Buy Co Inc, the No. 1 U.S. consumer electronics retailer, reported better-than-expected quarterly sales and earnings on Tuesday and raised its annual revenue forecast, led by robust demand for smartphones and wearable devices.

The results highlighted Best Buy's continued success in a gloomy U.S. retail industry, which has been battered in recent years as more customers desert malls and shop online.

The company's shares rose 4.2 percent to $65.10 in premarket trading.

Best Buy, which was struggling with declining sales and profits as recently as 2015, has turned itself around by closing underperforming stores, improving customer service and most importantly, matching Amazon.com Inc's low prices.

Best Buy's sales have beaten analysts' estimates in six of the past eight quarters, a feat unmatched by other electronics retailers such as hhgregg and RadioShack, which went bankrupt.

Richfield, Minnesota-based Best Buy has steadily gained market share for more than three years in a "slow-growth" consumer electronics environment, RBC Capital Markets analyst Scot Ciccarelli said earlier this month.

"Best Buy has already weathered the worst of the Amazon storm," Ciccarelli said.

Best Buy's sales at established stores rose 5.4 percent in the second quarter ended July 29, handily beating analysts' average expectation for a 2.1 percent increase, according to Consensus Metrix.

Online comparable sales in the United States surged about 31 percent, on top of a 23.7 percent increase last year, as faster shipping and improvements to Best Buy's checkout and search functions drew more shoppers.

The company now expects full-year revenue to rise about 4 percent, compared with an earlier forecast for a 2.5 percent increase.

Best Buy expects healthy consumer demand and upcoming product launches to boost revenue, Chief Financial Officer Corie Barry said on a call with analysts.

Barry also said it was "nearly impossible" to predict the impact on the company's business from Hurricane Harvey at this stage.

Comparable sales in Best Buy's home appliances business rose 30 percent in the second quarter, driven by strong demand in Mexico and Canada.

Net income attributable to Best Buy rose to $209 million or 67 cents per share, from $198 million or 61 cents per share, a year earlier.

Excluding one-time items, Best Buy earned 69 cents per share, beating analysts' estimates of 63 cents, according to Thomson Reuters I/B/E/S.

Net sales climbed 4.8 percent to $8.94 billion. Analysts had expected $8.66 billion. (Reporting by Vibhuti Sharma in Bengaluru; Editing by Sai Sachin Ravikumar)