Best Buy (NYSE: BBY) has posted $0.53 EPS versus $0.41 estimates from First Call and posted $9.92 Billion revenues versus a $9.45 Billion revenue estimate from First Call. The company has also raised its full year guidance to $3.10 to $3.20 versus a prior target of $3.00 to $3.15 EPS, although estimates are roughly $3.12 on last look. It also forecast roughly $40 Billion in annual revenues with a same store sales growth pegged at 4%.
For the quarter, Best Buy’s same store sales rose 6.7% and its Operating income as % of revenue rose to 3.5% from 2.3% in the November quarter of 2006.
One area analysts could harp on is that the merchandise inventory increased 22% year over year. Best Buy says this reflects new store growth and an increased availability of products such as video gaming, flat-panel TVs and notebook computers. It also reflects the impact of the calendar shift, as the quarter ended one week further into the holiday shopping season. So if you are a skeptic you can harp on it having too much inventory, and if you are a bull you can easily justify this surge in inventory.
Best Buy shares are up 1% at $51.75 in pre-market trading, although shares were up 4% initially. Its 52-week trading range has been $41.85 to $53.90.
Jon C. Ogg
December 18, 2007
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