Best Buy 4Q revenue slips; outlook muted
Updated: 4:06 p.m. | Posted: 8:16 a.m.
Best Buy's fourth-quarter revenue slipped in a holiday shopping season that has been rugged for almost all retailers and it offered a conservative outlook to start the year.
Shares were buoyed Thursday before the opening bell, however, after the electronics retailer declared a special dividend, a $1 billion share buyback and a 22 percent hike to its regular dividend.
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Retail consultant Howard Davidowitz said Best Buy's efforts to transform itself are far from complete.
"They have a lot more work to do online. And the only thing that is going to drive Best Buy's sales are going to be new product introductions," he said. "At the same time that's going on, they've got to continue to work on downsizing stores, closing bad stores."
Best Buy was especially hurt by falling demand for computing and mobile devices, which account for much of its U.S. revenue.
For the period ended Jan. 30, Best Buy earned $479 million, or $1.40 per share. A year earlier the company earned $519 million, or $1.46 per share.
Earnings, adjusted for one-time gains and costs, came to $1.53 per share. That beat the $1.40 per share that analysts surveyed by Zacks Investment Research were looking for.
Revenue totaled $13.62 billion, a decline from last year's $14.2 billion, and short of the $13.67 billion that Zacks' analysts expected.
For the full year, the chain reported an adjusted profit of $2.78 per share on revenue of $39.53 billion.
Best Buy Co. anticipates first-quarter adjusted profit in a range of 31 to 35 cents per share. Analysts polled by FactSet predict a profit of 39 cents per share.
Shares rose by 55 cents, less than 2 percent, in premarket trading.
Best Buy is raising its quarterly dividend to 28 cents per share, while the special dividend will be 45 cents per share. The quarterly dividend and special dividend will be paid on April 7 to shareholders of record on March 17. The $1 billion in stock buybacks are expected to be completed over the next two years.