Best Buy Q1 Profit Rises; Projects Q2 EPS Below Estimates; Announces CFO Change

(RTTNews) - Best Buy Co., Inc. (BBY) reported first-quarter non-GAAP earnings per share from continuing operations of $0.44, an increase of 19% from $0.37, a year ago. On average, 21 analysts polled by Thomson Reuters expected the company to report profit per share of $0.35 for the quarter. Analysts' estimates typically exclude special items.

Net earnings attributable to Best Buy shareholders increased to $229 million from $129 million, previous year. Earnings per share from continuing operations was $0.69, an increase from $0.10, last year.

Revenue was $8.44 billion compared to $8.56 billion, a year ago. Analysts expected revenue of $8.29 billion, for the quarter. Domestic revenue of $7.8 billion decreased 0.8% versus last year. Domestic comparable sales were down 0.1%. Enterprise comparable sales also declined 0.1%. International revenue was $614 million, down 8.1% from last year.

For second-quarter, the company's guidance is Enterprise revenue in the range of $8.35 billion to $8.45 billion and both Enterprise and Domestic comparable sales of approximately flat. The company expects non-GAAP earnings per share to be in the range of $0.38 to $0.42. Analysts expect the company to report profit per share of $0.50.

Sharon McCollam, Best Buy CFO, stated: "In line with our original expectations, there are two factors impacting our year-over-year non-GAAP EPS guidance for the second quarter. First, we are expecting an approximate $0.03 net negative impact from the lapping of the periodic profit sharing benefit from our services plan portfolio that we received in the second quarter of last year. Second, we are expecting an approximate $0.06 negative impact from the carryover of last September's services pricing investment. In addition, in digital imaging, we are now expecting an approximate $0.03 to $0.04 negative impact due to the April 2016 earthquake in Japan, which is impacting inventory availability in this high-margin category. Combined, these are putting $0.12 to $0.13 of pressure on second-quarter FY17, which will be partially offset by an approximate $0.04 benefit from share repurchases."

Shares of the company were down more than 5 percent, in premarket trading, following the announcement.

The company reaffirmed its previously provided full year financial outlook which includes approximately flat revenue and non-GAAP operating income, with non-GAAP EPS growth driven by share repurchases.

As part of an internal succession plan, Best Buy announced that Sharon McCollam, its chief administrative and chief financial officer, will be stepping down on June 14, 2016. McCollam will remain with the company in an advisory capacity until the end of the fiscal year. Corie Barry, current chief strategic growth officer, will become the company's chief financial officer at the conclusion of Best Buy's annual shareholder meeting.