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Last Update: 20-Nov-12 08:39 ET
Best Buy shares fall 4% following miss on earnings
Best Buy (BBY $13.18 -0.57) reported third quarter earnings of $0.03 per share, excluding non-recurring items, $0.09 worse than the Capital IQ consensus of $0.12 (Co on Oct 24 warned about Q3 results, consensus was $0.36 at the time), while revenues fell 3.5% year/year to $10.75 billion versus the $10.72 billion consensus. The Domestic segment revenue was $7.7 bln and declined 4.7% YoY. The Domestic segment revenue decline reflected a 4.0 percent comparable store sales decline and the impact of store closures. Best Buy recorded revenue of $431 mln in its online business, with growth in excess of 10 percent, and registered positive comparable store sales growth in mobile phones, appliances and tablets/eReaders. This growth was more than offset by comparable store sales declines in notebooks, gaming, digital imaging and televisions. The co believes that tablet and notebook comparable store sales were negatively impacted by slower consumer purchasing in anticipation of major product launches. Excluding restructuring charges primarily related to previously announced store closures, the Domestic segment operating income for the three months ended November 3, 2012 declined to $50 million ($16 million on a GAAP basis) from $249 million in the prior-year period. The decline was due to a lower gross profit rate, higher SG&A expense and lower revenue. The company lowered fiscal year 2013 guidance: The company currently expects to generate free cash flow in the range of $850 million to $1.05 billion for fiscal 2013. This amount compares with the company's previously communicated range of $1.25 to $1.5 billion that had been provided on August 21, 2012. The company is planning to announce revenue results for the nine weeks ending January 5, 2013 (fiscal Nov and Dec) on January 11, 2013. "In line with trends experienced over the last three years, Best Buy's third quarter financial performance was clearly unsatisfactory."
