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Shivani Kumaresan

Best Buy Shares Pop After Q4 Results; Hikes Dividend, Plans Buyback

  • Best Buy Co Inc (NYSE:BBY) reported a fourth-quarter FY22 sales decline of 3.4% year-on-year, to $16.36 billion, missing the consensus of $16.59 billion.
  • Domestic revenue fell 2.6%, primarily driven by a comparable sales decline of 2.1% and the loss of revenue from permanent store closures in the past year.
  • International revenue declined 10.7%, reflecting the closure of Mexico in FY22 and a comparable sales decline of 3.8% in Canada.
  • Enterprise comparable sales decreased 2.3% versus 12.6% growth last year.
  • Gross profit fell 6.5% Y/Y to $3.3 billion, with the margin contracting 70 basis points to 20.2%.
  • Operating income margin contracted 120 basis points to 4.9%. Operating income for the quarter fell 22.2% to $803 million.
  • Non-GAAP EPS of $2.73 was in line with the consensus.
  • Best Buy held $3.2 billion in cash and equivalents as of January 29, 2022. Cash provided by operating activities for twelve months totaled $3.3 billion.
  • Best Buy raised the quarterly cash dividend by 26% to $0.88 from $0.70 per share, payable on April 14, 2022, to shareholders of record on March 24, 2022.
  • In addition, the company’s board approved a new $5.0 billion share repurchase authorization, replacing the existing authorization dated February 2021, which had $1.6 billion remaining at FY22-end.
  • Outlook: Best Buy sees FY23 revenue of $49.3 billion - $50.8 billion versus the consensus of $51.05 billion.
  • Best Buy expects FY23 non-GAAP EPS of $8.85 - $9.15 versus the consensus of $9.16.
  • The company anticipated FY25 enterprise sales of $53.5 billion - $56.5 billion.
  • Price Action: BBY shares are trading higher by 4.15% at $105.04 on the last check Thursday.
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