Best Buy reports EPS in-line, revs in-line, comps below guidance; guides Q4 EPS below consensus, revs in-line (57.30)
- Reports Q3 (Oct) earnings of $0.78 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.78; revenues rose 4.2% year/year to $9.32 bln vs the $9.36 bln Capital IQ Consensus. Enterprise comparable sales increased 4.4% vs. guidance for +4.5-5.5%
- "Our Q3 results include the negative impact of two significant factors. First, despite our moderate expectations for mobile phone launches in the quarter, revenue in the mobile category was materially lower than expected. This was due to the fact that a major new phone did not launch until November, which is in our Q4. The related revenue impact in the quarter was more than $100 million. Second, like most retailers, we felt the impact of the natural disasters in south Texas, Florida, Puerto Rico and Mexico. We estimate the loss of revenue impacted our Enterprise comparable sales by 15 to 20 basis points, and that the related costs negatively impacted our EPS by approximately $0.03."
- Domestic online revenue of $1.1 billion increased 22.3% on a comparable basis primarily due to higher conversion rates and higher average order values. As a percentage of total Domestic revenue, online revenue increased 190 basis points to 12.7% versus 10.8% last year.
- Domestic gross profit rate was flat versus last year at 24.7%. Improved margin rates across multiple categories were offset by an approximately 25-basis point negative impact from lapping the $25 million Q3 FY17 periodic profit sharing benefit from the company's service plan portfolio.
- Co issues guidance for Q4, sees EPS of $1.89-1.99, excluding non-recurring items, vs. $2.03 Capital IQ Consensus Estimate; sees Q4 revs of $14.2-14.5 bln vs. $14.36 bln Capital IQ Consensus Estimate; sees enterprise comparable sales growth of 1.0% to 3.0%