Best Buy gains after pointing to future growth potential
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Best Buy (NYSE:BBY) tracked higher in early trading on Friday even after it reported hitting some Omicron and supply chain headwinds during the holiday quarter.
Domestic revenue fell 2.6% to $14.99B during the quarter. The decrease was primarily driven by a comparable sales decline of 2.1% and the loss of revenue from permanent store closures in the past year. Domestic online revenue fell 11.2% to $5.91B against the soft pandemic comparable.
BBY's gross profit rate fell to 20.0% of sales vs. 20.7% last year. The lower GAAP and non-GAAP gross profit rates were primarily driven by lower services margin rates, including pressure associated with the company’s new Totaltech membership offering, which was partially offset by higher profit-sharing revenue from the company’s private label and co-branded credit card arrangement.
CEO update: "We are deliberately investing in our future and furthering our competitive differentiation which, as expected, impacted our Q4 profitability. The biggest areas of investment were our new membership program, technology and Best Buy Health, all core to our future growth potential."
Looking ahead, Best Buy (BBY) sees full-year revenue of $49.3B to $50.8B vs. $50.8B consensus and full-year EPS of $8.85 to $9.15 vs. $9.36 consensus.
Best Buy (BBY) gained 2.90% in premarket trading to $103.76. Shares of BBY may be getting a lift from the dividend hike and new $5B buyback program announcement.