Consumer electronics retailer Best Buy Co., Inc. (BBY) reported Friday a loss for the fourth quarter that sharply narrowed from last year, reflecting lower charges. Adjusted earnings per share and quarterly revenues also topped analysts' expectations. The company also said it will not provide financial guidance, but indicated a weak first quarter.
Separately, Best Buy said it has not received any acquisition offer from its founder and former chairman Richard Schulze until the deadline that expired on Thursday. The company said it will continue to focus on its transformation for the benefit of all of its stakeholders.
Reports earlier in the stated that Best Buy has ended talks with Schulze and his private-equity partners in the deal, after a proposal for acquiring a minority stake in Best Buy in exchange for three seats on the board, was shot down by the company. However, it is still possible that Schulze would come back with another proposal.
"These results were driven by a compelling assortment of new products in key growth categories, increased "blue-shirt" training and higher customer engagement in our retail stores, and impactful 'traffic-generating' marketing activities," President and CEO Hubert Joly said in a statement.
Joly added that "It was a quarter that was driven, not given and we are encouraged by the intensity, collaboration and momentum that was generated by both our front line and corporate teams as we began to execute against our Renew Blue initiatives."
The Richfield, Minnesota-based retailer, which is also known as the 'big blue box' because of the prominent design on Best Buy stores, reported a net loss of $409 million or $1.21 per share for the fourth quarter, sharply narrower than $1.82 billion or $5.17 per share in the prior-year quarter. Loss from continuing operations for the year-ago quarter was $1.71 billion or $4.86 per share.
The results for the latest quarter include an after-tax non-cash impairment charge of $821 million primarily to reflect the write-off of goodwill for Canada and China, while the year-ago quarter included an after-tax non-cash impairment charge of $118 billion and an after-ax $1.3 billion impact of Best Buy Mobile profit share buyout.
Excluding charges, adjusted earnings form continuing operations was $554 million or $1.64 per share, compared to $783 million or $2.18 per share for the year-ago quarter.
On average, 22 analysts polled by Thomson Reuters expected the company to earn $1.54 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter edged up to $16.71 billion from $16.67 billion in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $16.34 billion by a whisker. Comparable store sales declined 0.8 percent on top of 1.3 percent drop last year.
Best Buy's domestic revenues for the quarter edged down 0.3 percent to $12.55 billion, while comparable store sales grew 0.9 percent. Meanwhile, international revenues grew 2.0 percent to $4.16 billion, despite comparable store sales drop of 6.6 percent. The company noted that the online channel delivered a 11 percent revenue increase in the domestic segment.
For fiscal 2013, the company reported a net loss of $249 million or $0.73 per share, sharply narrower than $1.32 billion or $3.57 per share in the prior year. Loss from continuing operations for last year was $1.13 billion or $3.05 per share.
Excluding items, adjusted earnings form continuing operations was $889 million or $2.62 per share, compared to $1.37 billion or $3.61 per share for the year ago. Revenue for the full year declined to $49.62 billion from $50.04 billion in the previous year.
Analysts expected the company to report full-year 2013 earnings of $2.49 per share on annual revenues of $49.27 billion.
Looking ahead, the company said it will not be providing financial guidance, but noted that it expects the first quarter of fiscal 2014 to be under significant pressure due to the absence of an additional week and the impact of this year's "pre-Super Bowl" sales shifting into the fourth quarter of fiscal 2013.
"To build on this momentum in fiscal 2014, we remain intently focused on the two problems we have to solve: stabilizing and improving our comparable store sales and increasing profitability across our global businesses. We recognize, however, that fiscal 2014 is a year of transition and that further investment will be required to advance our Renew Blue transformation," Joly added.
The company noted that to support the Renew Blue transformation initiatives, it expects capital spending in fiscal 2014 to be in the range of $700 to $800 million and incremental SG&A investments in the range of $150 to $200 million.
Meanwhile, the company said Renew Blue cost reduction initiatives that were enacted over the last several weeks has already seen Phase One reductions of $150 million, included an initial headcount reduction of about 400 people.
In Friday's regular trading session, BBY is currently trading at $17.20, up $0.79 or 4.81% on a volume of 3.87 million shares. In the past 52-week period, the stock has been trading in a range of $11.20 to $27.95.
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