Best Buy (BBY 73.12, +0.68) has climbed 0.9% after reporting better than expected results.
The electronics retailer reported above-consensus fourth quarter earnings of $2.42 per share on a 14.0% year-over-year increase in revenue to $15.36 billion, which was also ahead of market estimates.
Best Buy's guidance was a bit mixed, but pretty positive overall. The company expects that first quarter earnings will come in between $0.68 and $0.73 per share, which is below market estimates. First quarter revenue is expected between $8.65 billion and $8.75 billion, which is just ahead of expectations. The company expects a solid remainder of the year, priming the market for full year earnings between $4.80 per share and $5.00 per share, which is well ahead of estimates. Revenue is expected between $41 billion and $42 billion.
Best Buy's report also featured a 32.0% increase of the quarterly dividend, which now stands at $0.45 per share. The retailer expects to repurchase at least $1.50 billion worth of stock during the fiscal year.
Looking at the fourth quarter breakdown, revenue in the Domestic segment grew 13.4% to $13.99 billion while International revenue jumped 20.3% to $1.38 billion. Domestic comparable sales increased 9.0% after falling 0.7% during the year-ago period while International comparable sales increased 9.9% after edging up 0.9% one year ago. Domestic revenue from online sales grew 17.9% year-over-year to $2.80 billion. Domestic gross margin was unchanged at 22.3%.
The company closed 18 large-format stores during the year, but an extra week of sales boosted quarterly revenue by $715 million. Comparable sales growth was generated across most categories with mobile phones, gaming, appliances, smart home, wearables, and home theater leading the way.
International revenue growth was fueled by strong comparable sales growth in Canada and Mexico, a benefit from favorable currency translations, and $45 million of revenue from an extra week of sales. International gross margin declined to 22.4% from 24.6% due, in part, to lower sales in the higher-margin services category.
Best Buy announced it will close all of its remaining 257 Best Buy Mobile stand-alone stores by May 31. The company expects to incur a pre-tax restructuring charge of $55 million to $65 million during the first quarter. This translates to about $0.14 to $0.17 per share.