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Highlights From Best Buy’s Q3 Earnings Report

By John F. Heerdink, Jr.

Recently, Best Buy Co., Inc. (BBY) announced its earnings report for the 13-week third quarter ending November 2, 2019, raising revenue expectations for the next quarter as well as full-year FY20 outlook, as per reports.

Corie Barry, Best Buy CEO stated “Our teams delivered another strong quarter of top- and bottom-line growth,” “We are delivering on our purpose to enrich lives through technology by providing customers the products and solutions they want and need, combined with fast and convenient fulfillment. We are excited about our progress and opportunities as we execute on our Building the New Blue strategy, designed to develop deeper relationships with our customers and uniquely position us over the long term.”

Key Highlights Q3 FY20 Results (Domestic & International):

  • Domestic revenue of $8.96 billion was reported, an increase of 2.4% versus last year.
  • Domestic online revenue of $1.40 billion was reported, an increase of 15.0% on a comparable basis.
  • Domestic gross profit rate was 24.3% compared to 24.4% last year.
  • Domestic GAAP Selling, General and Administrative Expenses was $1.80 billion, or 20.1% of revenue, versus $1.82 billion, or 20.8% of revenue, last year.
  • As per non-GAAP basis, Selling, General and Administrative Expenses was $1.78 billion, or 19.9% of revenue, versus $1.81 billion, or 20.6% of revenue, last year.
  • International revenue of $800 million was reported, a decreased of 4.1% versus last year.
  • International gross profit rate was 22.5% beating last year at 22.2%.
  • International Selling, General and Administrative Expenses was $173 million, or 21.6% of revenue, versus $178 million, or 21.3% of revenue, last year.
  • Shareholders received a total of $499 million including share repurchases of $368 million and dividends of $131 million.
  • The quarter effective tax rate was 24.8% versus 16.1% last year.

Best Buy CFO Matt Bilunas commented, “The updated FY20 guidance we are providing today reiterates our prior revenue expectations and raises the non-GAAP EPS to the range to reflect the strong Q3 profitability as well as improved expectations for Q4. Our outlook continues to include our best estimate of the impact of tariffs on goods from China, both implemented and planned.”

Full-year FY20 financial outlook:

  • Enterprise revenue of $43.2 billion to $43.6 billion in comparison to the prior expectation of $43.1 billion to $43.6 billion.
  • Enterprise comparable sales growth of 1.0% to 2.0%, versus prior guidance of 0.7% to 1.7%.
  • Non-GAAP diluted EPS of $5.81 to $5.91, compared to $5.60 to $5.75.

A webcast of the event is to be available at www.investors.bestbuy.com, after the call on November 26, 2019.

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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(Read Original Story: Best Buy Reports Better-Than-Expected Third Quarter Results in Business Wire)


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