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March 14, 2022

Best Buy Wrestles with COVID, Supply Chain Issues in Q4

Posted In: Retail Articles
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With COVID-19 and supply chain issues weighing on the fourth quarter, Best Buy met a Wall Street estimate on earnings but fell short on revenues.

For the fourth quarter, net earnings were $626 million, or $2.62 per diluted share, versus $816 million, or $3.10 per diluted share, in the year-earlier period, Best Buy stated.

Adjusted for one-time events, diluted earnings per share were $2.73 versus $3.48 in the year-prior quarter.

Best Buy equaled a MarketBeat-published diluted earnings per share estimate of $2.73 but fell shy of a revenue estimate of $16.54 for the quarter.

Fourth-quarter comparable-store sales were down 2.3% after gaining 12.6% in the year-past period, the company noted.

Revenue for the quarter was $16.37 billion versus $16.94 billion in the year-previous period. Operating income was $803 million versus $1.03 billion in the year-before quarter, while adjusted operating income was $836 million down from $1.16 billion year-over-year.

Domestic segment comparable store sales in the quarter were down 2.1% after gaining 12.4% in the year-past period. Digital comp sales in the segment fell 11.2% after gaining 89.3% in the quarter year over year. Domestic segment revenue was $14.99 billion versus $15.4 billion in the year-previous quarter. In terms of merchandising, the largest comp drivers on a weighted basis were appliances, virtual reality, home theater and headphones.

For the full fiscal year, net earnings were $2.45 billion, or $9.84 per diluted share, versus $1.8 billion, or $6.84 per diluted share, in the fiscal year earlier, Best Buy stated.

Adjusted diluted earnings per share were $10.01 versus $7.91 in the year earlier.

Revenue for the full fiscal year was $51.76 billion versus $47.26 billion for the year previous. Operating income was $3.04 billion versus $2.39 billion in the year before while adjusted operating income was $3.09 billion up from $2.73 billion year-over-year.

“Our teams showed remarkable execution and dedication to serving our customers throughout the important gift-giving season,” said Corie Barry, Best Buy CEO, in announcing the financial results. “In Q4, we drove improvement in year-over-year customer satisfaction metrics across almost all areas, particularly for in-store, online and chat experiences. And even with online sales at almost 40% of our domestic revenue, we reached our fastest holiday delivery times ever, shipping products to customer homes more than 25% faster than last year and two years ago. I am truly grateful for, and continue to be impressed by, our associates’ dedication, resourcefulness and flat-out determination.”

Barry added that the $16.37 billion fourth-quarter revenue total was “impacted by more constrained inventory than expected, including some high-demand holiday items, and the temporary reduction in store hours in January due to Omicron-induced staffing challenges. 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.”

For all that, Barry said, “FY22 was another record year. In addition to record revenue and earnings, our leaders drove new ways of operating and our employees worked tirelessly to meet our customers’ technology needs with excellent service. From a financial perspective, our comparable sales growth was 10.4% on top of a very strong 9.7% last year, with revenue up $8.1 billion over the past two years. Compared to last year, our GAAP EPS was up 44% to $9.84 and our non-GAAP EPS was up 27% to $10.01.”

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