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Earnings Briefing and Analysis - Best Buy

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LONDON, September 4, 2014 /PRNewswire/ -- has issued free earnings briefing and analysis on Best Buy Co. Inc. (NYSE: BBY). The company reported its results for Q2 FY15 on Tuesday, August 26, 2014. During Q2 FY15, Best Buy's non-GAAP EPS from continuing operations increased $0.12 from Q2 FY14, while its comparable sales declined 2.7% Y-o-Y. Our free coverage report can be accessed at:

Earnings Overview  

During Q2 FY15, Best Buy reported revenue of $8.90 billion, compared with $9.27 billion, in the prior year quarter. Analysts from Bloomberg were anticipating revenue of $8.98 billion in Q2 FY15. During the reported quarter, the company's non-GAAP diluted EPS from continuing operations rose to $0.44, from $0.32 in Q2 FY14, while its GAAP diluted earnings from continuing operations fell to $0.42 per share, from $0.69, in the year ago period. Analysts at Bloomberg were expecting the company to report GAAP diluted earnings of $0.31 per share, during the reported quarter. Best Buy's domestic revenue declined 2.4% Y-o-Y to $7.59 billion in Q2 FY15, which was mainly driven by a comparable sales decline of 2.0% and a revenue decline of 25 basis points, due to the less favorable economics of the new credit card agreement. Additionally, on July 03, 2014, the company paid a quarterly dividend of $0.17 per common share outstanding, or $59 million. The free research on BBY can be downloaded as in PDF format at:

The company's domestic SG&A expenses for the reported quarter stood at $1.52 billion, or 20.1% of revenue, compared to $1.70 billion, or 21.9%, in Q2 FY14. On a non-GAAP basis, Best Buy's domestic SG&A expense for Q2 FY15 stood at $1.51 billion, or 19.9% of revenue, compared to $1.66 billion, or 21.3% of revenue, in the previous year quarter. The rate decline was primarily driven by the realization of Renew Blue cost reduction initiatives and tighter expense management throughout the company. During Q2 FY15, the company's International revenue declined 12.1% Y-o-Y to $1.31 billion, attributable to a comparable sales decline of 6.7% driven by China, Canada, and Mexico, the negative impact of foreign currency exchange rate fluctuations and the loss of revenue from the closure of large-format store in China. Further, Best Buy's International SG&A expenses for Q2 FY15 stood at $291 million, or 22.2% of revenue, compared to $334 million, or 22.4% of revenue, in Q2 FY14.

Best Buy Co. Inc.'s President and CEO, Hubert Joly, stated that the company's Renew Blue cost reduction and other SG&A cost containment initiatives drove better-than-expected results. In addition, he said that the company witnessed a shift in consumer behaviour during the quarter, as consumers now increasingly research and purchase online. While this led to a continuous decline in traffic at the company's brick and mortar stores, its in-store conversion and online traffic continued to increase due to the implementation of Renew Blue strategy which is in direct alignment with this shift. Joly concluded saying that the company is looking ahead to create a differentiated multi-channel customer experience such that every interaction customers have with the company makes them a promoter of the Best Buy brand. To support this, Best Buy Co. Inc. will be intensifying investments in customer-facing initiatives across both channels in the second half of 2014. Sign up and read the free analyst's notes on BBY at:

Further, Sharon McCollam, EVP, CAO and CFO of the company, commented that industry-wide sales are continuing to decline in many of its competing consumer electronics categories. The company is also witnessing the ongoing softness in the mobile phone category ahead of highly-anticipated new product launches. As a result, without any change in declining industry trends and with limited visibility to new product launch quantities, the company continues to expect comparable sales to decline by low-single digits in the third and fourth quarters.

Stock Performance 

On the day of the earnings release, August 26, 2014, Best Buy Co. Inc.'s stock took a beating of 6.85%, and ended the session at $29.80. The stock has recovered since then, although, on the last close, Wednesday, September 03, 2014, it finished 0.38% lower at $31.23. The stock vacillated between $31.08 and $31.51 during the session. A total of 2.99 million shares were traded, which was below its three months average volume of 4.49 million shares. Over the previous three trading sessions and from the beginning of 2014, the company's shares have declined 3.13% and 21.69%, respectively. However, the stock has advanced 7.06% over the last one month. Best Buy Co. Inc.'s shares are trading above their 50-day and 200-day moving averages of $30.49 and $30.10, respectively. Further, the stock traded at a PE ratio of 23.62 and has a Relative Strength Index (RSI) of 54.38. Visit Investor-Edge and access the latest research on BBY at:

Sneak Peek to Corporate Insider Trading  

On August 28, 2014, Mr. Richard M Schulze, Founder of Best Buy, sold 1,600 shares, worth $50,890.10 at a price of $31.81 per share. Complimentary in-depth research on BBY is available at:


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