Upcoming AWS Coverage on GameStop Post-Earnings Results
LONDON, UK / ACCESSWIRE / November 29, 2016 / Active Wall St. announces its post-earnings coverage on Best Buy Co., Inc. (NYSE: BBY). The company posted its financial results for the third quarter fiscal 2017 (Q3 FY17) on November 17, 2016. The Minneapolis, Minnesota-based company's GAAP and non-GAAP diluted EPS from continuing operations surged 62% and 51% y-o-y, respectively. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Best Buy Co's competitors within the Electronics Stores space, GameStop Corp. (NYSE: GME), reported on November 22, 2016, sales and earnings for the third quarter ended October 29, 2016. AWS will be initiating a research report on GameStop in the coming days.
Today, AWS is promoting its earnings coverage on BBY; touching on GME. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=BBY
http://www.activewallst.com/registration-3/?symbol=GME
Earnings Reviewed
Best Buy reported revenue of $8.95 billion in Q3 FY17 which came in above $8.82 billion recorded in Q3 FY16. Revenue numbers for Q3 FY17 also beat market forecasts of $8.84 billion. Enterprise comparable store revenue improved 1.8% in Q3 FY17 compared to a growth of 0.8% in Q3 FY16.
The consumer electronics retailer's GAAP net earnings from continuing operations came in at $192 million, or $0.60 per diluted share, in Q3 FY17 compared to $129 million, or $0.37 per diluted share, in Q3 FY16. The company reported non-GAAP net earnings from continuing operations of $198 million, or $0.62 per diluted share, in Q3 FY17 versus $144 million, or $0.41 per diluted share, in Q3 FY16. The non-GAAP net earnings from continuing operations for the reported quarter beat market expectations of $0.47 per diluted share.
Operating Metrics
In Q3 FY17, the company's gross margin improved to $2.20 billion, or 24.6% of revenue, from $2.11 billion, or 23.9% of revenue, in the year ago comparable period. The company's selling, general, and administrative expenses for Q3 FY17 came in at $1.89 billion, or 21.1% of revenues, compared to $1.87 billion, or 21.2% of revenues in Q3 FY16. Additionally, the company's operating margin also rose to $312 million, or 3.5% of revenues, in Q3 FY17 from $230 million, or 2.6% of revenues, in the prior year's same period.
Segment Performance
During Q3 FY17, the company's domestic segment's revenue grew to $8.19 billion from $8.09 billion in the previous year's same quarter. The segment's comparable revenue reported a 1.8% growth during the Q3 FY17 versus comparable revenue growth of 0.8% in the year ago period. Additionally, the segment's operating income for the reported period stood at $298 million, or 3.6% of segment revenues, compared to $244 million, or 3.0% of segment revenues, in Q3 FY16.
International segment contributed $753 million to total revenue in Q3 FY17 compared to $729 million in Q3 FY16. The segment's gross margin for Q3 FY17 was $183 million, or 24.3% of segment revenues, versus $164 million, or 22.5% of segment revenues, in the previous year's comparable quarter. Additionally, the segment reported operating income of $14 million in Q3 FY17 compared to an operating loss of $14 million in Q3 FY16.
Cash Flow and Balance Sheet
In the nine months ended October 29, 2016, net cash provided by operating activities surged to $1.30 billion, from $463 million in the first three quarters of FY16. As on October 29, 2016, the company had cash and cash equivalents balance of $1.34 billion compared to a balance of $1.70 billion as on October 31, 2015. The company reported long-term debt of $1.32 billion in its books of accounts as on October 29, 2016, versus $1.25 billion as on October 31, 2015.
Total merchandise inventories as of October 29, 2016, stood at $6.33 billion compared to $6.65 billion at the end of the third quarter FY16.
Dividends and Share Repurchases
On November 18, 2016, Best Buy's Board of Directors announced a regular quarterly cash dividend of $0.28 per common share. The dividend is payable on December 29, 2016, to shareholders of record at the close of business on December 08, 2016.
In Q3 FY17, the company repurchased 5.4 million shares for a total of $201 million under its $1 billion share repurchase program announced on February 25, 2016. On a year-to-date basis, the company has bought back 15.7 million shares worth $517 million.
During Q3 FY17, the company returned $290 million to its shareholder through share repurchases and dividends. Further, the company returned a total of $931 million to shareholders via share repurchases and dividends.
Earnings Outlook
In its guidance for Q4 FY17, Best Buy's expects enterprise revenue in the range of $13.4 billion to $13.6 billion with comparable sales change in the range of (1.0%) to 1.0%. Furthermore, non-GAAP diluted EPS for Q4 FY17 is anticipated to be in the range of $1.62 to $1.67.
Stock Performance
On Monday, the stock closed the trading session at $45.33, slipping 2.68% from its previous closing price of $46.58. A total volume of 7.08 million shares have exchanged hands, which was higher than the 3-month average volume of 5.37 million shares. Best Buy's stock price advanced 17.80% in the last month, 17.04% in the past three months, and 43.29% in the previous six months. Furthermore, since the start of the year, shares of the company have gained 54.76%. The stock is trading at a PE ratio of 13.93 and has a dividend yield of 2.47%.
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