Best Buy Co. Inc. topped Wall
Street forecasts for sales and profits in the fourth-quarter holiday
period, sending shares up 11 percent in early trading.
The Richfield, Minn.-based company reported that comparable sales
rose 3 percent, blowing past the 2 percent estimate most had
Net income was $735 million, or $2.69 a share, in the quarter that
ended Feb. 2, an increase from $364 million, or $1.23 a share from
the same period a year ago.
When adjusting for one-time costs, the company reported that
earnings per share jumped 12 percent to $2.72. Analysts had expected
the company to report earnings of $2.56.
“We are very proud of the financial results we have just delivered,”
Best Buy chief executive Hubert Joly said in a statement. “In
addition to these great financial results, we made significant
progress implementing our Best Buy 2020 strategy to enrich lives
through technology and further develop our competitive
Total revenue fell 3.7 percent to $14.80 billion, but still beat
expectations of $14.70 billion.
The company stressed that the current fiscal year is a week shorter
than last year, a swing of approximately $760 million in revenue and
approximately 20 cents in adjusted earnings in the fourth quarter.
Online sales continue to be a strong spot for the company, growing 9
percent in the quarter.
For the year, same-store sales grew 4.8 percent, with a jump of more
than 10 percent in online sales growth.
Total revenue for the year was almost $42.9 billion, up about 1.7
percent despite the calendar shift. Earnings per share were up 20
percent to $5.20.
During the year, the company purchased GreatCall, a digital
monitoring and emergency call service aimed at keeping older adults
safe in their homes, and launched a subscription service called
Total Tech Support, which gives consumers unlimited help in stores,
online or over the phone for about $200 a year.
“Best Buy continues to generate increasing traction in its
multi-channel quest, with both brick-and-mortar and online posting
impressive performance” for both the fourth quarter and the full
year, Moody’s analyst Charlie O’Shea said in a note ahead of the
company’s conference call with analysts and investors.
O’Shea said Best Buy’s 6.6 percent operating margin reflects
“meaningful year-over-year improvement.”
It was the seventh consecutive quarter the company has turned in
comparable store sales increases of 3 percent more.