Best Buy (BBY 55.91, -1.39) has slid 2.4% after reporting in-line results and issuing cautious guidance for the holiday quarter.
The electronics retailer reported in-line third quarter earnings of $0.78 per share on a 4.2% year-over-year increase in revenue to $9.32 billion, which was a bit shy of expectations.
However, cautious guidance for the fourth quarter has weighed on the stock, which is still up more than 30.0% for the year. Best Buy expects that earnings for the fourth quarter will be between $1.89 per share and $1.99 per share, which is shy of market expectations. Revenue is expected between $14.20 billion and $14.50 billion, which envelops current market expectations.
During the third quarter, the retailer's domestic revenue rose 3.7% to $8.49 billion while international revenue grew 10.1% to $829 million.
Domestic comparable store sales grew 4.4% after increasing 1.8% one year ago while International comparable sales increased 3.8%. Domestic comparable online sales increased 22.3% after increasing 24.1% one year ago. The company noted that hurricanes in the South and Southeast reduced comparable sales by about 15-20 basis points, which translates to about $0.03 per share.
Domestic gross margin was unchanged year-over-year at 24.7% while International gross margin declined to 22.2% from 24.3%. The international margin was pressured by lower Canadian sales in the higher-margin services category.