Best Buy Beats Up on Analysts Yet Again

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Best Buy (NYS: BBY) reported earnings on May 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 5 (Q1), Best Buy met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share increased significantly.


Gross margins contracted, operating margins grew, net margins increased.

Revenue details
Best Buy logged revenue of $11.61 billion. The 16 analysts polled by S&P Capital IQ expected a top line of $11.50 billion on the same basis. GAAP reported sales were 6.1% higher than the prior-year quarter's $10.94 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.72. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.60 per share. GAAP EPS of $0.46 for Q1 were 35% higher than the prior-year quarter's $0.34 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 25.0%, 30 basis points worse than the prior-year quarter. Operating margin was 3.4%, 80 basis points better than the prior-year quarter. Net margin was 1.4%, 20 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $10.74 billion. On the bottom line, the average EPS estimate is $0.33.

Next year's average estimate for revenue is $49.97 billion. The average EPS estimate is $3.61.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,129 members out of 1,174 rating the stock outperform, and 47 members rating it underperform. Among 280 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 270 give Best Buy a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Best Buy is hold, with an average price target of $27.64.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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