September 15th, 2009
Best Buy earnings miss targets
Best Buy’s second quarter earnings fell short of expectations.
Best Buy on Tuesday reported earnings of $158 million, or 37 cents a share, down 22 percent from a year ago. Wall Street was expecting earnings of 42 cents a share. Revenue was up 12 percent to $11 billion, which was ahead of Wall Street estimates calling for sales of $10.78 billion.
For the quarter ended Aug. 29, Best Buy said same store sales were down 3.9 percent from a year ago. In a statement, the company said it gained market share in its category.
In the U.S., second quarter revenue was $8.3 billion, up 2 percent from a year ago. However, Best Buy said traffic increased in its store but average ticket sales fell. Sales gains in notebook computers, mobile phones and flat-panel TVs were more than offset by gaming, digital cameras, movies and music. Gross margins were 24.4 percent, flat with a year ago.
Looking ahead to the fiscal year ending Feb. 27, Best Buy said it expects same store sales to be down 2 percent to flat. Revenue will be between $48 billion and $49 billion, up 8 percent. Annual non-GAAP earnings will be $2.70 to $3 a share. GAAP earnings will be $2.64 a share to $2.94 a share. Wall Street was expecting earnings of $2.87 a share.
Here’s the breakdown of Best Buy’s categories. The main takeaway is that the gains in the home office category are slowing.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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