New Technology Sales Growth Drives Best Buy Q3

Consumer enthusiasm for new technology has helped drive third quarter gains at Best Buy, said Hubert Joly, the company’s chairman and CEO.

Net earnings in the quarter came in at $239 million, or 78 cents per diluted share, versus $194 million, or 61 cents per diluted share, in the year-earlier period. Earnings per diluted share matched an analyst average estimate published by MarketBeat. Operating income was $350 million, up from $312 million in the 2016 quarter.

Comparable sales gained 4.4% company wide and 4.5% in the domestic division. Digital comparable sales advanced 22.3% in the domestic business and 3.8% in the international operation. Best Buy posted revenue of $9.32 billion in the third quarter versus $8.95 billion in the year-prior period. Domestic segment sales were $8.49 billion versus $8.19 billion in the year-previous quarter.

“In the third quarter, we delivered strong top and bottom line results with 4.4% comparable sales growth and 30% EPS growth,” Joly said. “Technology innovation is fueling demand, and our strategy is resonating with our customers. We are also making significant progress against our Best Buy 2020 strategy and are excited about the opportunities for long-term value creation.”

The company did note that the delay of Apple’s iPhone X launch and the recent hurricanes impacted sales results in the quarter.

Joly added, “Our third quarter results include the negative impact of two significant factors. First, despite our moderate expectations for mobile phone launches in the quarter, revenue in the mobile category was materially lower than expected. This was due to the fact that a major new phone did not launch until November, which is in our fourth quarter. The related revenue impact in the quarter was more than $100 million. Second, like most retailers, we felt the impact of the natural disasters in south Texas, Florida, Puerto Rico and Mexico. We estimate the loss of revenue impacted our enterprise comparable sales by 15 to 20 basis points, and that the related costs negatively impacted our EPS by approximately three cents. Looking ahead, we are very excited about our plans for holiday, including a curated assortment of great new technology products, free shipping with no minimums, and a range of new capabilities such as our new in-home advisor program, an updated gift center, and same-day delivery in 40 cities.”