Best Buy Co. Inc. (NYSE: BBY) reported third-quarter fiscal 2016 results before markets opened Thursday. The big-box retailer of electronics gear reported adjusted diluted earnings per share (EPS) of $0.41 and $8.82 billion in revenues. In the same period a year ago, Best Buy reported EPS of $0.34 on revenue of $9.03 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.35 and $8.86 billion in revenue.
Enterprise level same-store sales rose 0.8% year over year in the third quarter, after rising by 3.8% in the second quarter. In the United States, same-store sales rose by the same amount. Online comparable sales rose more than 18%.
Operating income rose 2.8% on an adjusted basis and 2.6% on a GAAP basis. Diluted GAAP EPS from continuing operations came in at $0.37.
The company’s chairman and CEO, Hubert Joly, said:
We of course recognize that we are up against a strong performance in the fourth quarter of last year and that the NPD industry declines that we saw in the third quarter, both sequentially and year-over-year, may continue throughout this year’s fourth quarter.
ALSO READ: Macy’s and Nordstrom Struggle to Adapt to Changing Retail Trends
CFO Sharon McCollam got to deliver the details:
In the Domestic business we are expecting (1) near flat revenue assuming an approximate 4% industry decline in the NPD-reported categories, in line with Q3, and the timing of the Super Bowl shifts approximately 40 basis points of sales out of Q4 into Q1 FY17; and (2) a non-GAAP operating income rate decline of 20 to 35 basis points driven by gross profit rate pressure and higher SG&A. … In the International business, due to the ongoing impacts of the Canadian brand consolidation, foreign currency fluctuations and softness in the Canadian market, we are expecting (1) an International revenue decline of approximately 30%; and (2) an International non-GAAP operating income rate in the range of positive 2% to 3%.
Based on the above expectations, our Enterprise level outlook is as follows: (1) a negative low-single digit revenue growth rate; and (2) a non-GAAP operating income rate decline of 25 to 45 basis points. From a tax rate perspective, we expect the non-GAAP effective income tax rate from continuing operations to be in the range of 36% to 37%, versus 34.2% last year, which is expected to result in a negative $0.04 to negative $0.06 year-over-year non-GAAP diluted EPS impact in Q4 FY16.
Analysts had expected fourth-quarter EPS of $1.46 on sales of $13.9 billion. For the full fiscal year, EPS was forecast at $2.65 on sales of $39.86 billion.
Needless to say, the fourth-quarter forecast has sent investors fleeing in Thursday’s premarket session. Shares traded down about 8% at $28.80, in a 52-week range of $28.32 to $42.00. Thomson Reuters had a consensus analyst price target of around $41.21 before the results were announced, with a high target of $50.00.
ALSO READ: Major Changes Seen in Warren Buffett and Berkshire Hathaway Stock Holdings
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.