Best Buy Earnings: Strong Performance in E-Commerce

May 25th, 2016 by Trefis Team
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BBY
Best Buy Co

Best Buy (NYSE:BBY) delivered better than expected results in the first quarter of fiscal 2017 on May 24. On a constant currency basis, Enterprise revenue declined 0.8% year-over-year (y-o-y) to $8.44 billion, easily exceeding the Reuters’ compiled consensus estimates of $8.29 billion. Also, its non-GAAP earnings of $0.44 per share versus $0.37 last year were on the higher end of its own guidance.

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In the Domestic business, comparable sales were essentially flat, versus company guidance of a 1% – 2% decline. ?The online business channel witnessed a strong 24% sales increase, which was driven by increased digital traffic and enhanced dot-com capabilities, including faster shipping. However, strong y-o-y sales growth in appliances was offset by continued softness in mobile phones and tablets.

In the International business, revenue declined 8.1% on a reported basis versus guidance of a 15% to 20% decline. This can be attributed to a lower than expected negative impact of foreign currency and higher sales retention in the Canadian business despite the closure of 66 large format stores last year.

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For the upcoming quarter, the company expects Enterprise revenue to be in the range of $8.35-$8.45 billion and both Enterprise and Domestic comparable sales to be approximately flat.

bbyfinal1Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Best Buy
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