Best Buy drops 2% in the stock market despite an upbeat Q4 earnings report

Best Buy drops 2% in the stock market despite an upbeat Q4 earnings report
Written by:
Michael Harris
28th February, 06:23
Updated: 11th March, 08:54
  • Best Buy drops 2% in the stock market despite an upbeat Q4 earnings report.
  • Best Buy posts $15.2 billion in revenue in the fourth quarter versus $15.05 billion expected.
  • Best Buy makes $2.90 of earnings per share in the fourth quarter versus $2.75 expected.

Best Buy announced its quarterly performance results on Thursday that came out stronger than expected. The optimism of the fourth-quarter results, according to the American multinational consumer electronics retailer, was largely attributed to higher sales of appliances, headphones, and other similar products during the holiday season.

CEO Corie Barry commented on Thursday that the company is currently evaluating the impact of the Coronavirus outbreak. She further added that much of the virus-driven business disruptions are likely to be confined to the first half of 2020.

Best Buy’s Q4 Financial Results Versus Analysts’ Estimates

According to Refinitiv, analysts were expecting the retailer to print $15.05 billion in revenue in the fourth quarter. On the earnings front, their estimate was capped at $2.75 per share. Experts had also anticipated a 1.9% increase in Best Buy’s same-store sales in the recent quarter. In its earnings report on Thursday, the company claimed to have generated a significantly higher $15.2 billion in revenue in the fourth quarter ($14.8 billion last year) while its EPS (earnings per share) was also recorded higher at $2.90 per share. Best Buy also noted a 3.2% increase in its same-store sales in the recent quarter.

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The company said that the decline in sales in the gaming sector was fairly offset by stronger results in the appliance, computing, headphones, tablets, and mobile phone units. Best Buy reported $745 million in net income in 2019’s Q4 as compared to $735 million registered in the same quarter last year.

Best Buy’s Guidance For Fiscal 2021

In its guidance for fiscal 2021, the company said that it now expects to generate revenue within the range of $43.3 billion to $44.3 billion. Its estimate for EPS was posted at $6.10 to $6.30 per share. The same-store sales, Best Buy added, are likely to keep flat or gain under 2% only. Analysts, on the other hand, forecast $44.22 billion in revenue for the retailer in fiscal 2021 and $6.25 of earnings per share.

Despite the optimistic report, Best Buy traded 2% down as the stock market remained weighed by the rising concerns about the Coronavirus outbreak. At the time of writing, Best Buy is exchanging hands at $78.31 per share that marks an over 10% drop in 2020 so far. Its performance in 2019, on the contrary, was reported largely upbeat with an annual gain of over 60% in the stock market. Best Buy currently has a market cap of $20.26 billion.

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