Best Buy Co Inc (NYSE:BBY) Raises Sales Guidance

Best Buy Co Inc (NYSE:BBY) stock rose 1.45% (As on November 23, 12:30:19 AM UTC-4, Source: Google Finance) after the company posted third quarter earnings for 2022 that beat analyst estimates while it raised its full-year guidance for sales, expecting a boost from Black Friday and the upcoming holiday shopping season. Profit for the third quarter declined to US$277 million from $499 million in the year-ago quarter. The company said lower margin rates and higher supply chain costs affected its gross profit rate. But the company said it would resume its quarterly dividend payout of $0.88 per share on January 3, 2023. At the end of Q3 FY23, merchandise inventories of $7.3 billion declined 14.7% compared to last year. The lower inventory balance was primarily driven by a year-over-year decline in revenue, both in Q3 and in anticipation of the expected decline in Q4. The decline in inventory was also impacted by the timing of inventory receipts, reflecting an earlier build of inventory in the prior year that was driven by a more uncertain supply chain environment and the anticipated phasing of holiday sales.

BBY in the third quarter of FY 22 has reported the adjusted earnings per share of $1.38, beating the analysts’ estimates for the adjusted earnings per share of $1.03. The company had reported the adjusted 11.1 percent fall in the revenue growth to $10.59 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $10.3 billion. Sales fell in nearly all categories, with the biggest declines in computing and consumer electronics. Domestic revenue of $9.80 billion decreased 10.8% versus last year primarily driven by a comparable sales decline of 10.5%. Domestic online revenue of $3.04 billion decreased 11.6% on a comparable basis, and as a percentage of total Domestic revenue, online revenue was 31.0% versus 31.3% last year. International revenue of $787 million decreased 14.9% versus last year. This decrease was primarily driven by a comparable sales decline of 9.3% and the negative impact of approximately 480 basis points from foreign currency exchange rates.

Additionally, in Q3 FY23, the company returned a total of $198 million to shareholders through dividends. On a year-to-date basis, the company has returned a total of $1.06 billion to shareholders through dividends of $595 million and share repurchases of $465 million.

The company now expects comparable sales to decline approximately 10% and our non-GAAP operating income rate to be slightly higher than 4%.

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