Best Buy Co Inc (NYSE:BBY) forecasts weaker same-store sales over the holiday period

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Best Buy Co Inc (NYSE:BBY) stock fell 2.18% (As on Nov 24, 11:20:20 AM UTC-4, Source: Google Finance) after the company posted stronger-than-expected third-quarter earnings but forecast weaker same-store sales over the holiday period. Supply-chain disruptions continue to ripple through the retail electronics sector. Enterprise comparable sales increased 1.6% versus 23% growth seen in the year-ago quarter. Adjusted gross profit declined 1% to $2,802 million, while adjusted gross margin contracted 40 basis points to 23.5%. Adjusted operating income came in at $694 million, down 4.7% from the year-ago quarter. Again, adjusted operating margin shrunk 30 bps to 5.8%.

BBY in the third quarter of FY 21 has reported the adjusted earnings per share of $2.08, beating the analysts’ estimates for the adjusted earnings per share of $1.95. The company had reported the adjusted revenue growth of 0.5 percent to $11.91 billion in the third quarter of FY 21, beating the analysts’ estimates for revenue of $11.71 billion.

Additionally, Best Buy ended the quarter with cash and cash equivalents of $3,465 million, long-term debt of $1,223 million and a total equity of $4,278 million. During the quarter, the company returned about $577 million to its shareholders via share repurchases of $405 million and dividends worth $172 million. For fiscal 2022, the company expects share repurchases of more than $2.5 billion.

The company now envisions fiscal 2022 enterprise revenues between $51.8 billion and $52.3 billion compared with the prior view of $51 billion to $52 billion, and up from year-ago reported figure of $47.3 billion. Best Buy guided enterprise comparable sales growth of 10.5-11.5% versus the prior forecast of 9-11% increase. The metric compared favorably with 9.7% increase registered in the past fiscal year. It continues to expect adjusted gross profit rate to be marginally higher than last year. Adjusted SG&A growth is anticipated at nearly 9.5% compared with the past projection of 9% rise.

For the fourth quarter, Best Buy estimates enterprise revenues in the band of $16.4-$16.9 billion, the mid-point $16.65 billion is below the prior-year’ quarter reported figure of $16.9 billion. The company expects enterprise comparable sales to be down 2% to up 1% versus 12.6% growth registered in the year-ago period. It projected a decline of approximately 30 basis points in adjusted gross profit rate compared with year-ago period. Adjusted SG&A dollar growth is anticipated at nearly 8%.

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