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Best Buy Co., Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 6, 2012 05:12PM

Best Buy Co., Inc. (BBY) filed Quarterly Report for the period ended 2012-08-04. Best Buy Co., Inc. has a market cap of $6.03 billion; its shares were traded at around $18.23 with a P/E ratio of 4.3 and P/S ratio of 0.1. The dividend yield of Best Buy Co., Inc. stocks is 3.6%. Best Buy Co., Inc. had an annual average earning growth of 15.8% over the past 10 years. GuruFocus rated Best Buy Co., Inc. the business predictability rank of 5-star.



Highlight of Business Operations:

The gross profit rate decreased by 1.1% of revenue for the second quarter of fiscal 2013. Gross profit rate declines in our Domestic and International segments accounted for a decrease of 0.8% of revenue and 0.3% of revenue, respectively. For the first six months of fiscal 2013, the gross profit rate decreased by 0.9% of revenue. Gross profit rate declines in our Domestic and International segments accounted for decreases of 0.5% of revenue and 0.4% of revenue, respectively. For further discussion of each segment s gross profit rate changes, see Segment Performance Summary, below.

The SG&A rate increased by 0.1% of revenue for the second quarter of fiscal 2013. Our Domestic segment contributed a rate decrease of 0.3% of revenue, with an offsetting rate increase of 0.4% of revenue from our International segment. For the first six months of fiscal 2013, the SG&A rate increased by 0.1% of revenue. Our Domestic segment contributed a rate decrease of 0.4% of revenue, with an offsetting rate increase of 0.5% of revenue from our International segment. For further discussion of each segment s SG&A rate changes, see Segment Performance Summary, below.

We recorded restructuring charges of $91 million and $218 million in the second quarter and first six months of fiscal 2013, all of which were recorded in our Domestic segment. We recorded no restructuring charges in the second quarter of fiscal 2012. In the first six months of fiscal 2012, we recorded $4 million of restructuring charges related primarily to our Domestic segment. These restructuring charges resulted in a decrease in our operating income in the second quarter and first six months of fiscal 2013 of 0.9% of revenue and 1.0% of revenue, respectively. The restructuring charges recorded in the first six months of fiscal 2012 had no impact on our operating income rate. For further discussion of each segment s restructuring charges, see Segment Performance Summary, below.

Operating income decreased $227 million, or 87.3%, and our operating income rate decreased to 0.3% of revenue in the second quarter of fiscal 2013, compared to 2.4% of revenue in the second quarter of fiscal 2012. For the first six months of fiscal 2013, operating income decreased 59.0% to $295 million or, as a percentage of revenue, to 1.3%. The decrease in operating income and operating income rate was driven by operating losses from our International segment, compared to operating income in the prior-year periods and decreases in operating income from our Domestic segment compared to the prior-year periods. The operating income decreases in the Domestic segment were due to a decrease in the gross profit rate and an increase in restructuring charges.

Adjusted operating income decreased $136 million, or 52.3%, and our adjusted net earnings decreased $82 million, or 54.7%, in the second quarter of fiscal 2013 compared to the second quarter of fiscal 2012. This resulted in a decrease to our adjusted diluted EPS of $0.19, or 48.7%. For the first six months of fiscal 2013, adjusted operating income decreased $211 million, or 29.1%, and our adjusted net earnings decreased $94 million, or 23.0%. The resulting impact on adjusted diluted EPS was a decrease of $0.12, or 11.5%. The decreases in adjusted operating income, adjusted net earnings, and adjusted diluted EPS were driven by operating losses from our International segment, compared to operating income in the prior-year periods, and decreases in operating income from our Domestic segment compared to the prior year. The operating income decreases in the Domestic segment were primarily due to a decrease in the gross profit rate.

Read the The complete Report



Stocks Discussed: BBY,
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