Best Buy Co. Inc. (BBY, Financial) released its third-quarter results before the opening bell on Nov. 26. The consumer electronics retailer surpassed Wall Street’s earnings and revenue projections.
Earnings highlights
The Richfield, Minnesota-based company posted adjusted earnings of $1.13 per share, topping estimates of $1.03. Revenue, on the other hand, grew 1.7% from the prior-year quarter to $9.76 billion. Analysts had anticipated revenue of $9.70 billion.
Same-store sales grew 1.7% in the reported quarter, which was more than the 1.3% growth analysts were expecting. The comps growth was attributed to strong demand for appliances, headphones, tablets, services and computing, which more than offset the decline in the gaming and home theater categories.
Reflecting on the company’s performance, CEO Corie Barry said:
“Our teams delivered another strong quarter of top- and bottom-line growth. We are delivering on our purpose to enrich lives through technology by providing customers the products and solutions they want and need, combined with fast and convenient fulfillment. We are excited about our progress and opportunities as we execute on our Building the New Blue strategy, designed to develop deeper relationships with our customers and uniquely position us over the long term.”
Domestic and international segments
Domestic revenue stood at $8.96 billion, up 2.4% year over year on the back of robust comps growth of 1.9% as well as contributions from the GreatCall acquisition. This was only partly offset by the revenue loss from store closures in the previous year. Online revenue was $1.40 billion, which reflected 15% growth from the same period last year. Higher average order values drove the increase.
On the international front, revenue declined 4.1% to $800 million, weighed down by the unfavorable impact of foreign currency exchange rates. Same-store sales dipped 1.9% year over year owing to poor sales in Canada.
Outlook
Best Buy also provided earnings guidance for fiscal 2020 after including the probable impact of tariffs on its products such as mobile phones, laptops and gaming consoles. The 15% import tax goes into effect on Dec.15.
Adjusted earnings per share are projected to be between $5.81 and $5.91, which is up from its previous guidance of $5.60 to $5.75. The company anticipates revenue in the range of $43.2 billion to $43.6 billion, as compared with its previously forecasted range of $43.1 billion to $43.6 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
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