Categories Earnings, LATEST, Retail

Best Buy stock slips on weak guidance, despite upbeat earnings

Best Buy’s (BBY) first-quarter earnings got a boost from broad-based revenue growth, aided by positive comparable store sales across all geographical regions, and exceeded market expectations. Though the stock bounced initially, it lost nearly 4% in the premarket reflecting the downbeat investor sentiment over the company’s soft guidance. Last week, the stock had jumped to a record high.

Best Buy first quarter 2019 earnings
Best Buy Q1 2019 Earnings Infographic

Net income from continuing operations increased to $208 million or $0.72 per share from $188 million or $0.60 per share in the first quarter of 2018. On an adjusted basis, earnings from continuing operations were $0.82 per share, up 37% compared to last year. Adjusted results exceeded analysts’ estimates by 8 cents.

During the three-month period, total revenues moved up 7% to $9.1 billion and surpassed expectations. Revenues from the domestic segment grew 6.3%, while international revenues jumped 13%. Overall comparable store sales grew 7.1%, helped by a 12% gain in online sales in the domestic segment. International comparable sales were higher by 6.4%.

“The top-line strength is the result of continued healthy consumer confidence, product innovation in multiple areas of technology, and our unique value proposition resonating with customers. We are executing well and customers are responding positively to the unique experience we provide to them online, in stores and in their homes,” said Best Buy CEO Hubert Joly.

The stock dipped after the earnings release, reflecting the downbeat investor sentiment over the soft guidance

Reflecting its continued investments in the long-term, such as supply chain and launch of Total Tech Support, Best Buy currently expects comparable store sales to grow 2% in fiscal 2019. Full-year revenues are forecast in the range of $41 billion to $42 billion, and adjusted earnings between $4.5 and $5 a share.

The comparable store sales outlook for the second quarter is a 3-4% increase. For the quarter, the company is looking for revenues in the range of $9.1 billion to $9.2 billion, and adjusted earnings in the range of $0.77 per share to $0.82 per share.

During the first quarter, Best Buy returned around $528 million to shareholders by way of share repurchases and dividends.

The electronics retailer recently revealed plans to sever ties with Huawei Technologies, after government agencies launched a crackdown against China-based tech companies. It is also planning to close its 250 small-format mobile phone stores in the US.

Most Popular

AVGO Earnings: All you need to know about Broadcom Q1 2021 earnings results

Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared

Infographic: Costco (COST) Q2 2021 sales up 15%; earnings miss

Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million

Will shifting to as-a-service model help Hewlett Packard in emerging stronger from COVID?

With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top