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SECURITY: BBY (Common)   EXCHANGE: New York Stock Exchange 

Minneapolis-based Best Buy Co., Inc. is North America's leading specialty retailer of consumer electronics, personal computers, entertainment software and appliances
. The Company's subsidiaries operate retail stores and/or web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), Geek Squad (GeekSquad.com), Magnolia Hi-Fi (MagnoliaHiFi.com), Media Play (MediaPlay.com), Sam Goody (SamGoody.com) and Suncoast (Suncoast.com). The Company's subsidiaries reach consumers through over 1,800 retail stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands

http://www.bestbuy.com

MAY 25, 2017

Best Buy Reports Better-Than-Expected First Quarter Revenue And Profit
BEST BUYSTAFF WRITER
Enterprise Comparable Sales Increased 1.6%
Diluted EPS of $0.60

MINNEAPOLIS, May 25, 2017 — Best Buy Co., Inc. (NYSE: BBY) today announced results for the first quarter ended April 29, 2017 (“Q1 FY18”), as compared to the first quarter ended April 30, 2016 (“Q1 FY17”). The company reported GAAP diluted earnings per share from continuing operations of $0.60, a decrease of 13% from $0.69 in Q1 FY17, entirely driven by the large CRT settlement proceeds received last year which did not recur in Q1 FY18. Non-GAAP diluted earnings per share from continuing operations were $0.60, an increase of 40% from $0.43 in Q1 FY17. (PDF version here.)
 

Q1 FY18    Q1 FY171
Revenue ($ in millions)2       
Enterprise    $8,528    $8,443
Domestic segment    $7,912    $7,829
International segment    $616    $614
Enterprise comparable sales % change    1.6%    (0.1%)
Domestic comparable sales % change    1.4%    (0.1%)
Domestic comparable online sales % change    22.5%    23.9%
International comparable sales % change    4.0%    N/A
Operating Income:
GAAP operating income as a % of revenue    3.5%    4.4%
Non-GAAP operating income as a % of revenue    3.5%    2.8%
Diluted Earnings per Share (EPS):
GAAP diluted EPS from continuing operations    $0.60    $0.69
Non-GAAP diluted EPS from continuing operations    $0.60    $0.43
 
For GAAP to non-GAAP reconciliations, please refer to the attached supporting schedule titled “Reconciliation of non-GAAP Financial Measures”.

“We are pleased today to report strong top and bottom line results for the first quarter of fiscal 2018,” said Hubert Joly, Best Buy chairman and CEO. “Our Q1 performance reflects the strength of our customer value proposition and continued momentum in the execution of our strategy. I want to thank all our associates across the company for their hard work in delivering these results.”

Joly continued, “We grew our Enterprise comparable sales by 1.6% during the quarter, driven by growth in both the Domestic and International segments. We also continued to drive significant growth in the online channel – with Domestic online comparable sales increasing 22.5%. On the profitability side, at the Enterprise level, we continued to optimize merchandise margins and exercise good expense management.”

Joly continued, “Compared to our expectations going into the quarter, our revenue was higher due to strong performance in gaming, a better-than-expected result in mobile, and the improvement of overall sales trends due to the arrival of delayed federal tax refund checks.”

Joly concluded, “We are energized about our opportunities and the strategy we are pursuing. We believe we are uniquely positioned to help our customers in a meaningful way with our combination of multi-channel assets – including our online, store and in-home capabilities, and I love how our teams are mobilized to deliver on our mission and Build the New Blue.”

Best Buy CFO Corie Barry commented, “Our second quarter guidance reflects the continuation of much of the positive category momentum we saw in the first quarter, as well as the increased level of growth investments included in our initial annual guidance. For the second quarter, we expect Enterprise comparable sales growth in the range of 1.5% to 2.5% and non-GAAP diluted EPS in the range of $0.57 to $0.62.3”

Barry continued, “For the full year, which as a reminder has an extra week, we are updating our topline guidance to reflect the better-than-expected first quarter results and our second quarter guidance. We are now expecting revenue growth of approximately 2.5% versus our original guidance of approximately 1.5%. Before I discuss our non-GAAP operating income growth guidance, I would like to note that due to a change in the non-GAAP treatment of non-restructuring property and equipment impairments, we have recast last year’s FY17 non-GAAP results.1 Therefore, our updated full-year non-GAAP operating income growth guidance is based on the recast FY17 non-GAAP operating income, which is $26 million, or 1.5%, lower than originally reported. In that context, we are expecting full year non-GAAP operating income growth of 3.5% to 8.5% versus our original guidance of 1% to 3% growth.3 We recognize it is early in the year and that historically the first quarter represents approximately 15% of our annual operating income. As such, this outlook range allows for a level of flexibility as we strategically balance our pace of investments, returns from new initiatives, ongoing cost reductions and efficiencies, and ongoing pressures in the business including approximately $60 million of lower profit share revenue.”


 

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