Why Best Buy Shares Are Rising Today

Best Buy Co., Inc. BBY shares are trading higher on Thursday. 

The company reported fourth-quarter adjusted earnings per share of $2.72, beating the street view of $2.51. Quarterly sales of $14.646 billion beat the analyst consensus of $14.533 billion.

Quarterly domestic revenue of $13.41 billion decreased 0.9% versus last year, driven by a comparable sales decline of 5.1%.

The company incurred $169 million of restructuring charges in the quarter under review, primarily related to employee termination benefits associated with an enterprise-wide restructuring initiative.

Domestic online revenue of $5.10 billion decreased 4.8% on a comparable basis. Domestic gross profit rate was 20.4% versus 19.8% last year due to improved financial performance from the company’s membership offerings, which included higher service margin rates, and an improved gross profit rate from the company’s Health initiatives. 

International revenue of $1.24 billion increased 2.7% versus last year. International gross profit rate was 21.0% versus 21.7% last year. The lower gross profit rate was primarily due to unfavorable product margin rates.

Dividend: The firm approved a 2% increase in the regular quarterly dividend to $0.94 per share. The regular quarterly dividend will be payable on April 11, 2024, to shareholders of record on March 21, 2024.

Outlook: Best Buy sees FY25 adjusted earnings per share of $5.75-$6.20 versus the $6.13 estimate. The company sees revenue of $41.3 billion-$42.6 billion versus $42.37 billion estimate.

“For FY25, we expect to expand our gross profit rate approximately 20 to 30 basis points versus FY24 as we continue to annualize the benefits of prior changes to our membership program, partially offset by expected pressure coming from the profit share on our credit card arrangement,” said Matt Bilunas, Best Buy CFO.

For first-quarter FY25, the company expects comparable sales to decline by approximately 5% and the non-GAAP operating income rate to be approximately 3.4%, which is flat on year.

Price Action: BBY shares are trading higher by 5.7% to $84.22 on the last check Thursday. 

Image Via Shutterstock