In its latest Q, Best Buy Co. believes its profit to be dropping off. This might be due to headwinds in demand rates of tablets and mobile phones. These offset growth in sales of lower-margin wearable devices.
THURSDAY: As per press releases, Chief Financial Officer, Sharon McCollam stated:
“Based on current industry dynamics, Best Buy is expecting revenue to decline in the first half of this year before rising again in the second half. Despite this soft topline environment, we will target flattish operating income.”
Strong dollar might influence the international revenue – bearish scale with 15% to 20% alongside soft mobile-phone sales might proceed.
Currently, the company shows 31 cents to 35 cents in adjusted earnings/share in Q – bearish from 37 cents and might go below than 39 cents, as per analysts. Moreover, it has eked out stronger profits amid cost cuts and rebounding revenue. No doubt, bullish housing market aided well in boosting up demands for appliances. However in 4Q, weak consumer electronic sales offset strength in the appliances and wearables and sales at existing stores slipped 1.7% after rising 2.8% a year earlier.
Over all, Best Buy reported a profit of $479 million, or $1.40 a share, down from $519 million, or $1.46 a share, a year earlier. Excluding certain items, the company EARNED $1.53, up from $1.48 a year earlier.
As for revenue, it has slid 4.1% to US$ 13.6 billion. Reuters believe analysts had projected US$ 1.39 in adjusted earning/share and US$ 13.61 billion in revenue.
Similarly, its gross profit margin is 21.7% from 21.3% – a year earlier.