For the period ended January 30, Best Buy earned $479 million, or $1.40 per share. Profit was $1.53 a share, excluding some items.
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That’s not exactly a ringing endorsement for a business that badly needs to start growing revenue – after all, there are only so many costs a company can cut to make an earnings number. Unfortunately for Best Buy, the company is at the mercy of consumer and manufacturer upgrade cycles and has few products to fall back on when mobile slows down.
Best Buy expects total revenue in the first quarter to decline 2.4% to 3.6% year over year.
Best Buy shares were up 1.8 percent at $32.05 in midday trading. “In the short-term, we will be characterized by our strong cash-flow-generating capabilities and our intent to regularly return excess free cash flow to shareholders”, said Best Buy’s chairman and CEO Hubert Joly in a statement. CIBC World Markets now owns 34,317 shares of the technology retailer’s stock valued at $1,045,000 after buying an additional 4,388 shares in the last quarter.
The company has had a longtime love/hate relationship with the mobile industry – when consumers are buying more phones, Best Buy’s revenue goes up, but when sales dry up, revenue takes a hit.
What stands out is that the revenue figure is a 4% drop from a year earlier. In addition the Company operates Magnolia Home Theater Magnolia Design Center and Pacific Kitchen and Home store-within-a-store experiences in the United States Best Buy stores. While it’s nice that its second-largest division (35% of sales), consumer electronics, saw comparable sales growth of 2.7% in the quarter, it pales in comparison to the 10.7% growth rate it saw a year ago. This is an increase from Best Buy Co’s previous quarterly dividend of $0.23.
Best Buy Co. fell in early trading after its forecasts for first-quarter sales and profit trailed analysts’ estimates, showing the electronics retailer sees last year’s sluggish demand continuing in 2016.
In its fourth quarter and full-year earnings report released today, Best Buy says overall e-commerce revenue grew 13.7% year over year in Q4, while total domestic and global revenue fell. The diluted EPS for the year was reported to be $2.78 per share, an increase of 18 cents as compared to last year when it came at $2.60 per share. Best Buy expects its Enterprise and Domestic comparable sales to disappoint at -1.0% to -2.0%, and it also expects that global revenues will decline by 15% to 20%.
For the year, Best Buy anticipates “flat” revenue and “flattish” operating income growth.
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McCollam said that “softness” in the mobile market was expected to continue, which was one of the primary concerns with BBY stock going into the report.
