Post Earnings Coverage as Best Buy's Q4 Non-GAAP EPS Surged 27%; Outperformed Expectations
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Upcoming AWS Coverage on Conn's Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 17, 2017 / Active Wall St. announces its post-earnings coverage on Best Buy Co., Inc. (NYSE: BBY). The Company announced its financial results for the fourth quarter fiscal 2017 (Q4 FY17) and full year fiscal 2017 (FY17) on March 01, 2017. The Minneapolis, Minnesota-based Company's GAAP and non-GAAP diluted EPS from continuing operations surged 37% and 27% y-o-y, respectively. Register with us now for your free membership at:
One of Best Buy Co.'s competitors within the Electronics Stores space, Conn's, Inc. (NASDAQ: CONN), is estimated to report earnings on April 04, 2017. AWS will be initiating a research report on Conn's in the coming days.
Today, AWS is promoting its earnings coverage on BBY; touching on CONN. Get our free coverage by signing up to:
Best Buy reported revenue of $13.48 billion in Q4 FY17, which came in marginally below $13.62 billion recorded in Q4 FY16. Revenue numbers for Q4 FY17 lagged behind market forecasts of $13.61 billion. Meanwhile, enterprise comparable sales were down by 0.7% in the reported quarter compared to a 1.7% decline in Q4 FY16.
The consumer electronics retailer's GAAP net earnings from continuing operations came in at $607 million, or $1.91 per diluted share, in Q4 FY17 compared to $477 million, or $1.39 per diluted share, in Q4 FY16. The Company reported non-GAAP net earnings of $621 million, or $1.95 per diluted share, in Q4 FY17 versus $524 million, or $1.53 per diluted share, in Q4 FY16. Wall Street had expected the Company to report non-GAAP net earnings of $1.66 per diluted share.
In FY17, Best Buy's revenue came in at $39.40 billion compared to $39.53 billion in the previous year. The Company reported net earnings from continuing operations of $1.21 billion, or $3.74 per diluted share, in FY17 versus $807 million, or $2.30 per diluted share, in FY16. Furthermore, the Company's non-GAAP net earnings during FY17 were $1.15 billion, or $3.56 per diluted share, compared to $973 million, or $2.78 per diluted share, in FY16.
Operating Metrics
In Q4 FY17, the Company's non-GAAP gross profit improved to $3.03 billion, or 22.5% of revenue from $2.95 billion, or 21.6% of revenue, in the year ago same period. The Company's non-GAAP selling, general, and administrative expenses for Q4 FY17 came in at $2.13 billion, or 15.8% of revenues, compared to $2.14 billion, or 15.7% of revenues, in Q4 FY16. Additionally, the Company's non-GAAP operating income also rose to $900 million, or 6.7% of revenues, in Q4 FY17 from $808 million, or 5.9% of revenues, in the prior year's comparable period.
Segment Performance
During Q4 FY17, Domestic segment's revenue fell to $12.34 billion from $12.51 billion in the previous year's corresponding quarter. The segment's comparable revenue reported a 0.9% decline during the Q4 FY17 versus a decline of 1.7% in the year ago same period. Additionally, the non-GAAP segment's operating income for the reported period stood at $819 million, or 6.6% of segment revenues, compared to $756 million, or 6.0% of segment revenues, in Q4 FY16.
International segment contributed $1.14 billion to total revenue in Q4 FY17 compared to $1.12 billion in Q4 FY16. The segment's non-GAAP gross profit for Q4 FY17 was $281 million, or 24.6% of segment revenues, versus $244 million, or 21.8% of segment revenues, in previous year's comparable quarter. Additionally, the segment reported non-GAAP operating income of $81 million, 7.1% of segment revenues, in Q4 FY17 compared to $52 million, or 4.7% of segment revenues, in Q4 FY16.
Cash Flow and Balance Sheet
In year ended January 28, 2017, net cash provided by operating activities surged to $2.55 billion from $1.32 billion in FY16. As on January 28, 2017, the Company had cash and cash equivalents balance of $2.24 billion compared to a balance of $1.98 billion as on January 30, 2016. The Company reported long-term debt of $1.32 billion in its books of accounts as on January 28, 2017 versus $1.34 billion as on January 30, 2016. Furthermore, total merchandise inventories as of January 28, 2017, stood at $4.86 billion compared with $5.05 billion at the end of FY17.
Dividends and Share Repurchases
In a separate press release on March 01, 2017, Best Buy's Board of Directors announced a 21% hike in the regular quarterly dividend to $0.34 per share. The dividend is payable on April 12, 2017, to shareholders of record at the close of business on March 22, 2017.
In Q4 FY17, the Company repurchased 5.3 million shares for a total of $226 million under its $1 billion share repurchase program announced on February 25, 2016. In FY17, the Company has bought back 21.0 million shares worth $743 million. Additionally, on March 01, 2017, the Company announced a new $3 billion share repurchase plan expected to be completed over the next two years.
Earnings Outlook
In its guidance for FY18, Best Buy's expects enterprise revenue growth of approximately 1.5% on a 53-week basis. The Company projects enterprise non-GAAP operating income growth rate in FY18 to be in the low single digits on a 53-week basis.
For Q1 FY18, enterprise revenue in anticipated to be in the range of $8.2 billion to $8.3 billion with comparable sales change in the range of (1.0%) to (2.0%). Furthermore, non-GAAP diluted EPS for Q1 FY18 is anticipated to be in the range of $0.35 to $0.40.
Stock Performance
On March 16, 2017, Best Buy's share price finished the trading session at $44.50, marginally advancing 0.20%. A total volume of 3.80 million shares exchanged hands. The stock has surged 18.87% and 42.09% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 4.29%. The stock is trading at a PE ratio of 11.83 and has a dividend yield of 2.65%.
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