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Best Buy raises 4Q profit outlook
http://www.businessweek.com/ap/financialnews/D8FLQTR84.htm?campaign_id=apn_home_down&chan=db
FEB. 9 4:06 P.M. ET Consumers' growing appetite for flat-screen TVs led Best Buy Co. to boost its fourth-quarter earnings outlook, sending its shares up 8 percent in late trading.
The nation's biggest consumer electronics chain also credited strong gift-card spending and tighter expense controls for raising the range of its earnings expectations Thursday.
For the quarter ending Feb. 25, Best Buy projected earnings from continuing operations of $1.25 to $1.30 per share, versus its previous view which called for earnings at the high end of a $1.06 to $1.16 per share range. For fiscal 2006, Best Buy forecast earnings from continuing operations of $2.24 to $2.29 per share.
Analysts' average estimates are $1.16 per share for the current quarter, and $2.14 for fiscal 2006, according to a survey by Thomson Financial.
In the prior-year period, the retailer reported adjusted earnings from continuing operations of $1.04 per share.
Sales in stores open at least one year -- a closely watched performance gauge called comparable sales -- are expected to increase 6 percent to 7 percent in the fourth quarter, up from a previously forecast 3 percent to 5 percent range.
Darren Jackson, chief financial officer, said comparable store sales rose by the low double-digit percentages in January on the strength of flat-panel televisions, portable audio players and video gaming.
CEO Brad Anderson credited the company's ongoing effort to convert its stores to focus on particular customer groups, such as soccer moms or small-business owners, for the improved outlook.
He said the company plans to keep it up in fiscal 2007, by building more Magnolia Home Theater sections into an unspecified number of existing stores and by adding elements of its Best Buy for Business division, which includes Geek Squad technical support, to more than 120 U.S. stores.
"Additionally, we're gearing up to open a record number of new stores in the coming year as we continue to grow our business," he said in a statement.
Best Buy announced that it planned to open nearly 90 new stores in the United States and Canada during its 2007 fiscal year. Most of the stores were scheduled to open in the third quarter, in time to catch the holiday shopping season.
In a research report released Thursday, Piper Jaffray analyst Mitchell Kaiser wrote store openings exceeded his expectations and he praised the focus on the Magnolia and business-to-business divisions.
"We applaud the customer centricity focus on the Magnolia and Best Buy for Business segments, which in our view are the most impactful segments," Kaiser wrote. "For Magnolia, our optimism is due to the HDTV cycle and services/installation component and for Best Buy for Business of the Geek Squad focus."
Best Buy shares rose $3.95, or 8.1 percent, to $52.78 in late afternoon trading on the New York Stock Exchange, near the upper end of the stock's 52-week range of $31.93 to $53.17.
http://www.businessweek.com/ap/financialnews/D8FLQTR84.htm?campaign_id=apn_home_down&chan=db
FEB. 9 4:06 P.M. ET Consumers' growing appetite for flat-screen TVs led Best Buy Co. to boost its fourth-quarter earnings outlook, sending its shares up 8 percent in late trading.
The nation's biggest consumer electronics chain also credited strong gift-card spending and tighter expense controls for raising the range of its earnings expectations Thursday.
For the quarter ending Feb. 25, Best Buy projected earnings from continuing operations of $1.25 to $1.30 per share, versus its previous view which called for earnings at the high end of a $1.06 to $1.16 per share range. For fiscal 2006, Best Buy forecast earnings from continuing operations of $2.24 to $2.29 per share.
Analysts' average estimates are $1.16 per share for the current quarter, and $2.14 for fiscal 2006, according to a survey by Thomson Financial.
In the prior-year period, the retailer reported adjusted earnings from continuing operations of $1.04 per share.
Sales in stores open at least one year -- a closely watched performance gauge called comparable sales -- are expected to increase 6 percent to 7 percent in the fourth quarter, up from a previously forecast 3 percent to 5 percent range.
Darren Jackson, chief financial officer, said comparable store sales rose by the low double-digit percentages in January on the strength of flat-panel televisions, portable audio players and video gaming.
CEO Brad Anderson credited the company's ongoing effort to convert its stores to focus on particular customer groups, such as soccer moms or small-business owners, for the improved outlook.
He said the company plans to keep it up in fiscal 2007, by building more Magnolia Home Theater sections into an unspecified number of existing stores and by adding elements of its Best Buy for Business division, which includes Geek Squad technical support, to more than 120 U.S. stores.
"Additionally, we're gearing up to open a record number of new stores in the coming year as we continue to grow our business," he said in a statement.
Best Buy announced that it planned to open nearly 90 new stores in the United States and Canada during its 2007 fiscal year. Most of the stores were scheduled to open in the third quarter, in time to catch the holiday shopping season.
In a research report released Thursday, Piper Jaffray analyst Mitchell Kaiser wrote store openings exceeded his expectations and he praised the focus on the Magnolia and business-to-business divisions.
"We applaud the customer centricity focus on the Magnolia and Best Buy for Business segments, which in our view are the most impactful segments," Kaiser wrote. "For Magnolia, our optimism is due to the HDTV cycle and services/installation component and for Best Buy for Business of the Geek Squad focus."
Best Buy shares rose $3.95, or 8.1 percent, to $52.78 in late afternoon trading on the New York Stock Exchange, near the upper end of the stock's 52-week range of $31.93 to $53.17.
