Best Buy overcame a challenging discretionary spending climate to beat a Wall Street estimate for earnings and revenue for the fourth quarter despite lower comparable sales.
Net earnings for the 14-week fourth quarter were $460, or $2.12 per diluted share, versus $495, or $2.23 per diluted share, in the 13-week year-prior period. Adjusted for one-time events, diluted earnings per share were $2.72 versus $2.61.
A fourth quarter analyst consensus estimate published by Yahoo Finance forecast earnings per adjusted diluted share of $2.52 and revenue of $14.56 billion.
Comparable sales slid 4.8%, the company reported. Revenue was $14.65 billion versus $14.74 billion in the year-before quarter. Operating income was $561 million versus $597 million in the year-previous period, while adjusted operating income was $735 million versus $704 million.
Revenue for stores operating in the United States was $13.41 billion, down 0.9% year over year, driven by a comparable sales decline of 5.1%, which was partially offset by $675 million of revenue from the extra week.
For the full year, net earnings were $1.24 billion, or $5.68 per diluted share, versus $1.42 billion, or $6.29 per diluted share, in the year prior. Adjusted net earnings per diluted share were $6.37 versus $7.08.
Revenue was $43.45 billion versus $46.3 billion in the year before, Best Buy stated. Operating income was $1.57 billion versus $1.8 billion in the year previous while adjusted operating income was $1.79 billion versus $2.03 billion.
In a conference call, Corie Barry, Best Buy CEO, said a late holiday season sales surge just before Christmas helped results. In 2024, she said the electronics sector should see less volatility. The company priorities for the year are to invigorate targeted customer experiences with greater personalization, drive operational efficiency and effectiveness, continue a disciplined approach to capital spending and “explore, pilot and drive incremental revenue streams,” Barry said.
Barry noted inflation would continue to inhibit discretionary good demand, but Best Buy expects a strengthening economy to help turn around the electronics sector, as should the replacement cycle in relationship to the COVID-19 pandemic. The company will open a couple of small store format locations in markets where it has not had a physical presence, and it will test the closure of a full-size store and its replacement in the same market with a small store, she said. Best Buy will highlight new technology as it emerges in categories across the store, including appliances, while investing in its health care initiatives, services and vendor partnerships, Barry added.
“I’m proud of the performance of our teams across the company as they showed resourcefulness, passion and an unwavering focus on our customers this past year, In the fourth quarter and throughout FY24, we demonstrated strong operational execution as we navigated a pressured consumer electronics sales environment,” Barry said. “This allowed us to deliver annual profitability at the high end of our original guidance range even though sales came in below our original guidance range. Importantly, we grew our paid membership base and drove customer experience improvements in many areas of our business, particularly in services and delivery. As we enter fiscal year 2025, we are energized about delivering on our purpose to ‘Enrich Lives through Technology’ in our vibrant, always changing industry. In what we expect to be a year of increasing industry sales stabilization, we are focused on sharpening our customer experiences and industry positioning while maintaining, if not expanding, our operating income rate on a 52-week basis.”
