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UPDATE: Best Buy Shares Jump On Earnings Beat

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Editor's note: A previous version of this story said Best Buy missed revenue expectations. A statement from the company has been added, in the fourth paragraph.

Shares of Best Buy Co. Inc. (NYSE: BBY) jumped more than 3% in pre-market trading after the company reported better-than-expected earnings for the fourth quarter. The company announced its plans to pay a special dividend of $0.51 per share and increase its regular quarterly dividend by 21% to $0.23 per share.

Best Buy's board also announced $1 billion in share repurchases over three years.

The Richfield, Minnesota-based company posted quarterly earnings of $519 million, or $1.46 per share, compared to $293 million, or $0.83 per share, in the year-ago quarter. Its adjusted EPS came in at $1.48 per share.

Its revenue climbed to $14.21 billion versus $14.03 billion. Analysts on average were expecting earnings of $1.35 per share on revenue of $14.35 billion. According to the company, though, "several analysts did not update their revenue estimates after [Best Buy] announced the sale of Five Star, meaning that Q4 China revenue is part of that estimate.

"Not factoring the sale is why it will appear that we missed on the top line. We don't believe that tells the whole story," a Best Buy spokesperson said.

Best Buy's same-store sales surged 2.0% in the quarter.

Domestic revenue rose 3.2% to $12.70 billion in the quarter, while domestic online revenue gained 9.7% to $1.72 billion. International revenue slipped 12.4% to $1.51 billion in the quarter.

Hubert Joly, Best Buy president and CEO, said, "As we look forward to fiscal 2016 and beyond, it is imperative that we continue to focus on driving comparable sales and improving our operating income rate while funding investments in our future. As we've previously shared, we are pursuing a strategy that is focused on delivering advice, service and convenience at competitive prices to our customers. Within this strategy, we are focused on driving a number of growth initiatives around key product categories, life events and services. To drive these initiatives, we are pursuing and investing in the transformation of key functions and processes. We will also, in fiscal 2016, be facing industry and economic pressures on our business related to deflationary pricing and weak industry demand in certain product categories that we discussed last quarter.

Best Buy's shares rose 3.42% to $39.95 in pre-market trading.

Posted-In: profitEarnings News


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