July bookstore sales rose 4.9% over July 2017, according to preliminary estimates released by the U.S. Census Department. Sales this July were $660 million, up from $629 million a year ago. The July increase continues a solid rally for sales through brick-and-mortar stores after sales got off to a weak start in January. With several months of mid-single digit increases, bookstore sales for the first seven months of 2018 were $5.36 billion, down 0.5% from the comparable period a year ago. For the entire retail segment, July sales were up 6.7% over July 2017 and sales for the seven-month period rose 5.5%.
Best Buy Co., Inc. (NYSE: BBY) today announced results for the third quarter ended October 28, 2017 (“Q3 FY18”), as compared to the third quarter ended October 29, 2016 (“Q3 FY17”). The company reported diluted earnings per share from continuing operations of $0.78, an increase of 30% from $0.60 in Q3 FY17.
“In the third quarter, we delivered strong top and bottom line results with 4.4% comparable sales growth and 30% EPS growth,” said Hubert Joly, Best Buy chairman and CEO. “Technology innovation is fueling demand and our strategy is resonating with our customers. We are also making significant progress against our Best Buy 2020 strategy and are excited about the opportunities for long-term value creation. And while we are investing in key initiatives and capabilities, we are also able to generate significant returns for our shareholders through the growth of our EPS and our capital allocation strategy.”
Joly continued, “Our Q3 results include the negative impact of two significant factors. First, despite our moderate expectations for mobile phone launches in the quarter, revenue in the mobile category was materially lower than expected. This was due to the fact that a major new phone did not launch until November, which is in our Q4. The related revenue impact in the quarter was more than $100 million. Second, like most retailers, we felt the impact of the natural disasters in south Texas, Florida, Puerto Rico and Mexico. We estimate the loss of revenue impacted our Enterprise comparable sales by 15 to 20 basis points, and that the related costs negatively impacted our EPS by approximately $0.03.”
Joly concluded, “Looking ahead, we are very excited about our plans for holiday, including a curated assortment of great new technology products, free shipping with no minimums, and a range of new capabilities such as our new in-home advisor program, an updated gift center, and same-day delivery in 40 cities. We believe we are well positioned for a successful season and therefore, we are raising our financial outlook for the fourth quarter and for the year. I would like to thank all of our associates for their work this last quarter, and for what they will do this holiday season.”
Best Buy CFO Corie Barry commented, “Today we are raising our full year revenue growth outlook to 4.0% to 4.8% versus our previous outlook of approximately 4.0% and raising our non-GAAP operating income growth outlook to 7.0% to 9.5%3 versus our previous outlook of 4.0% to 9.0%.”
Barry continued, “As a result, we are raising our Q4 outlook versus what was implied in the expectations provided on our last earnings call. Our Q4 guidance reflects a number of factors. First, as we discussed last quarter, we made strategic decisions to proactively make additional investments in the back half of the year to continue to drive the Best Buy 2020 strategy forward. Those additional investments are in areas such as customer choice in shipping, eCommerce and our long-term strategic vision for supply chain. Second, the outlook includes approximately $20 million, or $0.04 per share, of lower profit sharing benefit than we received in Q4 FY17. Third, our fourth quarter and full year performance is expected to result in higher incentive compensation expenses in the fourth quarter compared to last Q4. This higher incentive compensation is due to both better performance this year, and the fact that we are lapping a reversal of incentive compensation expense in Q4 FY17 that adjusted accruals from earlier quarters of the year. Fourth, the extra week in the quarter adds approximately $100 million of additional SG&A expense.”
Barry concluded, “So far this year we have returned $1.45 billion in cash to our shareholders, including $1.14 billion in share repurchases and $310 million in dividends. We are pleased to announce that we are planning to spend approximately $2 billion on share repurchases this fiscal year, versus our original expectation of $1.5 billion.”
Domestic revenue of $8.5 billion increased 3.6% versus last year driven by comparable sales growth of 4.5%, partially offset by the loss of revenue from 10 large format and 44 Best Buy Mobile store closures.
From a merchandising perspective, the company generated growth across almost all of its categories, with the largest drivers of comparable sales being appliances, computing and smart home.
Domestic online revenue of $1.1 billion increased 22.3% on a comparable basis primarily due to higher conversion rates and higher average order values. As a percentage of total Domestic revenue, online revenue increased 190 basis points to 12.7% versus 10.8% last year.
Domestic Gross Profit Rate
Domestic gross profit rate was flat versus last year at 24.7%. Improved margin rates across multiple categories were offset by an approximately 25-basis point negative impact from lapping the $25 million Q3 FY17 periodic profit sharing benefit from the company’s service plan portfolio.4
more detail at: http://investors.bestbuy.com/investor-relations/news-and-events/financial-releases/news-details/2017/Best-Buy-Reports-Third-Quarter-Results/default.aspx