Best Buy Recovered, but First Quarter Outlook Is Perilous

Before you go, we thought you'd like these...
Before you go close icon

BestBuy storefront OKBest Buy Co. Inc. (NYSE: BBY) was supposed to report results last night, but that was also the deadline for the company's ousted founder to make a firm offer to acquire control of the firm. The offer did not arrive, but earnings did this morning. Best Buy reported fourth-quarter and fiscal year 2013 results before markets opened this morning.

For the quarter, the big-box retailer of electronics gear reported adjusted earnings per share (EPS) of $1.64 and $16.71 billion in revenues. In the same period a year ago, Best Buy reported EPS of $2.18 on revenue of $16.67 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.54 and $16.34 billion in revenue.

On a GAAP basis, Best Buy posted a quarterly net EPS loss of $1.21, which includes a $2.42 per share benefit related to the "impact of goodwill impairments." In its last fiscal year, Best Buy reported a GAAP loss of $4.86 per share.

For the full year, Best Buy reported adjusted EPS of $2.62 on revenues of $49.62 billion, compared with adjusted EPS of $3.61 on revenues of $50.04 billion for fiscal year 2012. The consensus estimates called for full year EPS of $2.49 on revenues of $49.27 billion.

The company's CEO said:

It was a quarter that was driven, not given …. To build on this momentum in fiscal 2014, we remain intently focused on the two problems we have to solve: stabilizing and improving our comparable store sales and increasing profitability across our global businesses. We recognize, however, that fiscal 2014 is a year of transition and that further investment will be required to advance our Renew Blue transformation.

Same-store sales fell 0.8% globally, but the decline in the company's international segment totaled 6.6%. Online sales grew by 11.2% in the U.S. in the quarter, but that was less than half the growth in the same period a year ago.

The company's CFO said the store would not provide financial guidance for the 2014 fiscal year, but did note a few issues for the first quarter. First, a $0.14 hit to EPS as a result of an early Super Bowl; second, a less favorable product mix; third, a "carry-over effect" on marketing costs; fourth, the new price-matching program; and finally, timing and impact of capital and SG&A spending. All in all, the first quarter sounds like it will have a hard time living up to analysts' consensus estimate for EPS of $0.46 on revenues of $10.87 billion.

Shares are up about 6% in premarket trading, at $16.41 in a 52-week range of $11.20 to $27.95. Thomson Reuters had a consensus analyst price target of around $15.10 before today's results were announced. The share price came off that low on hopes of a buyout by founder Richard Schulze. Now what?


Filed under: 24/7 Wall St. Wire, Earnings, Retail, Services Tagged: BBY
Read Full Story

Markets

S&P 500 2,343.98 -1.98 -0.08%
DJIA 20,596.72 -59.86 -0.29%
NASDAQ 5,828.74 11.04 0.19%
DAX 12,064.27 24.59 0.20%
NIKKEI 225 19,262.53 177.22 0.93%
HANG SENG 24,358.27 30.57 0.13%
USD (per EUR) 1.08 0.00 0.15%
USD (per CHF) 0.99 0.00 0.02%
JPY (per USD) 111.32 0.34 0.30%
GBP (per USD) 1.25 0.00 -0.33%

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners