Best Buy Q3 Profit Tops Estimates; Cautions On Outlook

(RTTNews) - Best Buy Co., Inc. (BBY) reported third quarter net earnings from continuing operations to shareholders of $129 million or $0.37 per share compared to $116 million or $0.33 per share, last year. Non-GAAP net earnings was $144 million or $0.41 per share compared to $121 million or $0.34 per share, prior year. 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. For the third-quarter, the company increased its non-GAAP operating income rate by 40 basis points to 2.8%.

Revenue was $8.82 billion compared to $9.03 billion, a year ago. Analysts expected revenue of $8.86 billion for the quarter. Domestic revenue of $8.1 billion increased 1.2% from last year. In the Domestic business, comparable sales, excluding the impact of installment billing, increased 0.5%.

For the fourth-quarter, on Enterprise level, Best Buy expects: a negative low-single digit revenue growth rate; and a non-GAAP operating income rate decline of 25 to 45 basis points.

For the fourth-quarter, from a tax rate perspective, the company expect the non-GAAP effective income tax rate from continuing operations to be in the range of 36% to 37%, versus 34.2% last year, which is expected to result in a negative $0.04 to negative $0.06 year-over-year non-GAAP EPS impact in fourth quarter of fiscal 2016.

Sharon McCollam, Best Buy CFO, stated, "The 4.3% decline we saw in the NPD-reported categories got progressively worse throughout the quarter, which adds a level of caution to our outlook."

Hubert Joly, Best Buy chairman and CEO, said: "The NPD industry declines that we saw in the third quarter, both sequentially and year-over-year, may continue throughout this year's fourth quarter. We have also made incremental investments in services pricing and SG&A that are putting pressure on our fourth quarter earnings outlook."