Best Buy's sales dropped, but profits rose during holidays
- Author: Patricia Jimenez Mar 02, 2017,
Mar 02, 2017, 0:30
Over all, for the quarter ended January 28, Best Buy earned $607 million, or $1.91 a share, up from $479 million, or $1.40 a share, a year ago. However, Best Buy has continued to grab share.
Best Buy's domestic same-store sales fell 0.9%.
Comparable store sales in the US were down 0.9 percent in the quarter and overall revenue was down slightly to $13.48 billion, lower than the $13.62 billion analysts expected.
Revenue for the quarter declined slightly to $13.48 billion from $13.62 billion a year earlier.
Further, the company announced a 21 percent increase in regular quarterly dividend to $0.34 per share.
Best Buy Co. has been facing pressure from Amazon and other retailers.
Domestic online comparable sales increased 17.5%, due to increased traffic and higher conversion rates. And the company has been shipping goods from all of its stores, which means speedier deliveries.
The company had said in November it expected to take a $200 million hit from Samsung Galaxy Note 7 smartphone recalls and the absence of those products during the holiday quarter. "At the same time, our revenue was hindered by unprecedented product availability constraints across multiple vendors and categories, only some of which were anticipated". He also pointed to "considerably weaker-than-expected demand in the gaming category". He noted that before Christmas, Amazon pushed its own lineup of devices and often used deep discounts to attract shoppers.
One year ago, Best Buy earned $1.53 per share on $13.62 billion in revenue.
For the current quarter, Best Buy expects adjusted per-share earnings in the range of 35 cents to 40 cents, below the consensus Wall Street estimate of 49 cents.
But revenue fell 1 percent to $13.48 billion in the period, missing Street forecasts.
Net earnings rose 26.7% to $607 million, beating expectations of $524 million. Analysts' estimates typically exclude special items.
In order to execute the two-year $3 billion share repurchase plan, the board of directors approved a new $5 billion share repurchase authorization for the company's common stock, superseding the existing authorization dated June 2011 which had $2.2 billion in purchases remaining.