BBY Reaffirms FY12 Guidance

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Last Update: 14-Jun-11 09:54 ET

Best Buy (BBY $30.72 +1.90) reported first quarter earnings of $0.35 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.33.

Revenue rose 1.4% year/year to $10.94 billion versus the $10.7 billion consensus and included a modest comparable store sales decline of 1.7% year/year.

Within the Domestic segment, areas of comparable store sales growth included mobile phones, mobile computing (including tablets), eReaders, appliances and services. The online channel was key in driving growth, delivering a 12% revenue increase in the Domestic segment during the quarter. These sales gains were offset by declines in television, digital imaging, and physical media. Growth in the International segment was led by the continued strong performance of the Five Star business in China, which delivered comparable store sales gains during the period, while Europe and Canada each had modest comparable store sales declines.

Total company gross profit dollars declined 1% during the quarter, with the Domestic segment gross profit declining 3%, largely offset by International segment growth of 6%. The Domestic segment gross profit dollar decline was primarily driven by a rate decline of 60 bps. The primary factors influencing the rate included: increased promotions to drive improved revenue, industry-wide product supply interruptions of digital imaging products due to the events in Japan, higher transportation costs, and the impact of lapping a large annual vendor rebate that occurred in fiscal first quarter 2011. Partially offsetting these factors was the continued favorable mix impact from the strong growth of mobile phones.

The company reaffirmed fiscal year 2012 guidance at $3.30 to $3.55 versus the $3.46 Capital IQ Consensus Estimate and expects revenue to be $51.0 billion to $52.5 billion versus the $51.82 billion Capital IQ Consensus Estimate.

During the first quarter of fiscal 2012, the company repurchased $505 million, or 16.6 million shares of its common stock at an average price of $30.43 per share. The co has approx. $800 million remaining capacity under its existing share repurchase authorization as of the end of the fiscal first quarter.