Best Buy forecast misses expectations

Thu Feb 25, 2016 8:07am EST
 
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(Reuters) - Best Buy Co Inc (BBY.N: Quote) forecast current-quarter sales and profit below analysts' estimates as the biggest U.S. consumer electronics retailer by store count struggles with falling sales of mobile devices.

The company's shares fell 3 percent to $30.50 in premarket trading on Thursday.

Best Buy also said it would buy back up to $1 billion in shares over the next two years and it announced a special dividend of 45 cents per share.

Best Buy forecast revenue of $8.25 billion-$8.35 billion and a profit of 31-35 cents per share for the first quarter. Analysts on average were expecting revenue of $8.45 billion and a profit of 39 cents per share, according to Thomson Reuters I/B/E/S.

Best Buy expects revenue declines in the first half of the year, followed by growth in the second half, Chief Financial Officer Sharon McCollam said. "In this context, we are targeting flat domestic (U.S.) revenue for the full year ... but recognize that it will be challenging without a strong mobile cycle."

Sales at established stores fell 1.7 percent in the fourth quarter. Analysts on average had expected a 1.3 percent fall, according to research firm Consensus Metrix.

Sales of computing and mobile devices fell 6.8 percent in the United States. The category accounts for 43 percent of the company's total U.S. revenue.

Best Buy's net income fell 7.7 percent to $479 million, or $1.40 per share, in the quarter ended Jan. 30.

Excluding items, the company earned $1.53 per share from continuing operations, beating the average analyst estimate of $1.39.   Continued...

 
A man walks to a Best Buy store in Calgary, Alberta March 28, 2015. REUTERS/Todd Korol