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Best Buy, J. C. Penney Q4 Results Top View

bestbuyjcp 27feb20 lt

Best Buy Co. Inc. (BBY) Thursday reported a fourth-quarter profit that increased 1.4 percent from last year, while, J. C. Penney Co.'s (JCP) quarterly profit dropped 64 percent. However, the results of the companies topped analysts' estimates.

Best Buy boosted its quarterly dividend by 10 percent. It expects profit for the first-quarter and full year in line with analysts' view.

J. C. Penney expects to close at least six store locations in fiscal 2020, and annual comparable store sales to decline in a range of 3.5 percent to 4.5 percent.

Meanwhile, Best Buy reported that its net earnings for the fourth-quarter of fiscal year 2020 increased 1.4 percent to $745 million from $735 million, with earnings per share improving to $2.84 from $2.69 in the prior year.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations.

Adjusted earnings per share for the quarter were $2.90 compared to $2.72 in the previous year. On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $2.75 per share for the forth-quarter. Analysts' estimates typically exclude special items.

The company's board approved a 10 percent increase in the regular quarterly dividend to $0.55 per share, effective immediately. The regular quarterly dividend will be payable on April 9, 2020, to shareholders of record as of the close of business on March 19, 2020.

The company plans to spend between $750 million and $1.0 billion on share repurchases in fiscal year 2021.

For the first quarter, the company forecasts adjusted earnings per share to be in the range of $1.00 - $1.05 and enterprise revenue of $9.1 billion to $9.2 billion. Analysts expect the company to report earnings of $1.01 per share for the quarter on revenues of $9.28 billion.

For fiscal year 2021, the company projects earnings per share of $6.10 to $6.30 and enterprise revenue of $43.3 billion to $44.3 billion. The Street expects earnings of $6.25 per share for the year on revenues of $44.22 billion.

The company expects full-year comparable sales growth in the range of flat to 2 percent.

The company views the Coronavirus outbreak as a relatively short-term disruption that does not impact its long-term strategy and initiatives.

The retailer said it is confident to achieve its fiscal year 2025 targets, specifically the financial targets of $50 billion in revenue and a 5 percent adjusted operating income rate.

Revenue for the quarter grew 2.7 percent to $15.20 billion from $14.80 billion last year. Wall Street analysts were looking for revenue estimate of $15.05 billion for the quarter.

Domestic revenue increased 2.6 percent year-over-year to $13.85 billion, driven by comparable sales growth of 3.4 percent, partially offset by the loss of revenue from store closures in the past year.

Quarterly international revenue was $1.35 billion up 3.4 percent from the previous year, primarily driven by the impact of about 160 basis points of favorable foreign currency exchange rates and comparable sales growth of 1.6 percent, which was driven by Canada.

Meanwhile, the Plano, Texas-based department store chain J. C. Penney Co. reported its net income for the fourth quarter of fiscal year 2019 dropped 64 percent to $27 million from $75 million last year, while earnings per share fell to $0.08 from $0.24 in the previous year.

However, both adjusted earnings per share and revenue for the quarter beat analysts' expectations.

Adjusted net income was $43 million or $0.13 per share, compared to $57 million or $0.18 per share, last year. Analysts expect the company to report loss of $0.06 per share for the fourth-quarter.

The company expects to close at least six store locations in fiscal 2020.

Total revenues for the fourth quarter decreased about 7.7 percent to $3.49 billion from $3.79 billion in the prior year. Analysts expected revenues of $3.44 billion for the quarter.

Comparable store sales for the quarter decreased 7 percent, while it was down 6 percent in the prior year.

Adjusted comparable store sales, which exclude the impact of the Company's exit from major appliance and in-store furniture categories, decreased 4.7 percent for the quarter.

For fiscal 2020, the company projects comparable store sales to decline in a range of 3.5 percent to 4.5 percent. The guidance does not include any potential impact from the Coronavirus situation.

BBY is trading at $79.40, down $2.78 or 3.38 percent. JCP is trading at $0.68, down $0.04 or 6.06 percent.

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