Best Buy reports 4Q EPS increase

MINNEAPOLIS Best Buy has reported net earnings of $737 million, or $1.71 per diluted share, for its fiscal fourth quarter ended on March 1. This represents a diluted earnings per share increase of 10%, compared with $1.55 per diluted share, or $763 million, for the prior year’s fiscal fourth quarter, which had one extra week.

The company noted that the quarter’s operating results were in line with its mid-February guidance update, when, after a solid holiday shopping season, Best Buy reduced its expectations for fiscal 2008 earnings due to a slowdown in customer traffic. The diluted EPS was higher than the updated annual guidance range of $3.05 to $3.10 due primarily to a lower-than-expected effective income tax rate.

For the fiscal 2008 fourth quarter, Best Buy’s revenue increased 4% to $13.4 billion, compared with revenue of $12.9 billion for the fourth quarter of fiscal 2007. According the company, the revenue increase reflected the net addition of 137 new stores in the past 12 months, which was partially offset by the loss of an extra week in the fiscal 2008 fourth quarter. Excluding the impact of the lost week, revenue grew 9% in the fiscal quarter.

The company reported a comparable-store sales decline of 0.2% for the fourth quarter, which the company said reflected a decline in the domestic segment, coupled with growth in the smaller international segment.

“In a year of ever-changing variables, the one constant, as always, was our employees’ execution. That’s the spine of everything we do as a company, and it always will be. We know the year ahead is going to be challenging, but we see that as an opportunity to leverage our strengths – and a chance to further demonstrate why Best Buy matters for customers,” said Brian Dunn, president and coo. “You’ll see us get even sharper on the power of our brand in the year ahead. It is our growth story. It’s the story of our employees, the value they create when they are part of a customer’s shopping equation, and the standard of service we intend to hold ourselves to. Our investments flow directly from that story – here in the U.S. and around the world.” 

The company estimates annual earnings per diluted share of $3.25 to $3.40 for fiscal 2009, which ends on Feb. 28, 2009. Its initial earnings guidance represents an average increase of 7%, year-over-year.