Best Buy (BBY, Financial) was down -6.64% to $70.90 on Thursday after reporting first-quarter earnings before the market’s open. For its first quarter, the company beat its earnings per share estimate by 8 cents at 82 cents. Revenue was also a beat at $9.11 billion, outperforming the street’s estimate by $380 million and increasing 6.8% year over year.
Best Buy is a consumer electronics retailer headquartered in Minnesota. The company has a market cap of $21.41 billion.
Revenue breakdown
Best Buy reported total first-quarter revenue of $9.11 billion, an increase of 6.8% from the comparable quarter. Revenue was driven primarily by the company’s domestic business, which reported $8.4 billion in revenue for a gain of 6.3%. International accounted for 7.65% of revenue at $697 million. For the quarter, international revenue also reported a year-over-year increase, with a gain of 13.1%.
In its largest, domestic market category, computing and mobile phones reported the greatest majority of revenue at 46%, followed by consumer electronics at 32%. Online domestic sales were also up 12% year over year. Total domestic revenue results were impacted by the closing of 17 large-format and 193 Best Buy Mobile stores, which also created some uncertainty around its future growth prospects. In international, revenue was helped by sales growth in Canada and Mexico as well favorable currency exchange rate affects.
Comments from Best Buy CEO Hubert Joly highlighted some of the company’s strengths for the quarter.
“The top-line strength is the result of continued healthy consumer confidence, product innovation in multiple areas of technology, and our unique value proposition resonating with customers. We are executing well and customers are responding positively to the unique experience we provide to them online, in stores and in their homes.”
Earnings breakdown
For the quarter, Best Buy reported adjusted earnings per share of 82 cents. Earnings per share were up 37% from the comparable quarter.
Domestic gross profit was $1.96 billion, increasing from $1.87 billion in the comparable quarter. Domestic operating income was $303 million, up from $298 million.
In the international category, gross profit was $163 million, an increase from $151 million in the comparable quarter. International operating income reported a loss of -$1 million compared to a positive $2 million in the comparable quarter.
Stock price analysis
On Thursday, the stock fell -6.64% or -$5.05. It closed trading on Thursday at $70.90. It has a 200-day moving average of $65.68 and a 50-day moving average of $73.21. For the one-year period it has a return of 50.63%.
The company has been paying a steady quarterly dividend with its next declaration date expected around June 1. Annually, it has paid a dividend of $1.68 over the past year. Currently, it has a forward dividend yield of 2.37%.
Outlook
Management made no changes to its fiscal year 2019 outlook.
- Enterprise revenue of $41 billion to $42 billion.
- Enterprise comparable sales of flat to growth of 2.0%.
- Non-GAAP effective income tax rate of approximately 25.0%.
- Non-GAAP diluted earnings per share of $4.80 to $5.00, for comparable year growth of 9% to 13%.
Its financial outlook for the second quarter of 2019 included the following:
- Enterprise revenue of $9.1 billion to $9.2 billion.
- Enterprise comparable sales growth of 3% to 4%.
- Domestic comparable sales growth of 3% to 4%.
- International comparable sales growth of 1% to 4%.
- Non-GAAP diluted EPS of 77 cents to 82 cents, for comparable quarter growth of 12% to 19%.
Disclosure: I do not directly own any shares of Best Buy.
