Best Buy Earnings: Here’s Why Investors are Selling Shares Now

Best Buy Co. Inc. (NYSE:BBY) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3%.

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Best Buy Co. Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 55.56% to $0.32 in the quarter versus EPS of $0.72 in the year-earlier quarter.

Revenue: Decreased 19.21% to $9.38 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Best Buy Co. Inc. reported adjusted EPS income of $0.32 per share. By that measure, the company beat the mean analyst estimate of $0.25. It missed the average revenue estimate of $10.64 billion.

Quoting Management: Hubert Joly, Best Buy president and CEO, commented, “In the first quarter, we continued to make substantial progress on our Renew Blue priorities. This progress included (1) driving a 16% increase in Domestic comparable online sales; (2) improving our customer Net Promoter Score by over 300 basis points over the last five months; (3) reaching an agreement with Samsung to establish Samsung Experience Shops in our retail stores and beginning their roll out; (4) negotiating overall rent reductions for a number of stores and closing one large format store; and (5) eliminating $175 million in annualized SG&A and supply chain costs in addition to $150 million eliminated last quarter. In addition, we are pleased that we were able to reach a definitive agreement to sell our 50% interest in our European business.”

Key Stats (on next page)…

Revenue decreased 43.87% from $16.71 billion in the previous quarter. EPS decreased 80.49% from $1.64 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.14 to a profit $0.11. For the current year, the average estimate has moved up from a profit of $2.17 to a profit of $2.18 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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