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Best Buy, BJ's Wholesale, Big Lots Report Q4 Profits; Best Buy Boosts Dividend 26%

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Retailers Best Buy Co., Inc. (BBY), BJ's Wholesale Club Holdings Inc. (BJ) and Big Lots, Inc. (BIG) reported profits for the fourth quarter that decreased at Best Buy and Big Lots, while increasing at BJ's.

Adjusted earnings at Best Buy matched analysts' expectations, while it topped at BJ's and missed at Big Lots. Best Buy also approved a 26 percent increase in dividend and approved a new $5.0 billion share repurchase.

Best Buy's net earnings for the quarter decreased to $626 million or $2.62 per share from $816 million or $3.10 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $2.73 per share, compared to $3.48 per share a year ago.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $2.73 per share for the quarter. Analysts' estimates typically exclude special items.

Enterprise revenues for the quarter declined 3.4 percent to $16.37 billion from $16.94 billion in the same quarter last year. Analysts had a consensus revenue estimate of $16.59 billion.

Enterprise comparable sales decreased 2.3 percent, compared to an increase of 12.6 percent last year.

Domestic revenue decreased 2.6 percent from last year to $14.99 billion, mainly driven by comparable sales decline of 2.1 percent and loss of revenue from store closures in the past year. Domestic online revenue of $5.91 billion declined 11.2 percent from last year.

International revenue also declined 10.7 percent to $1.4 billion, driven primarily by comparable sales drop of 3.8 percent in Canada and closure of Mexico, partially offset by the benefit of approximately 150 basis points of favorable foreign currency exchange rates.

Looking ahead to fiscal 2023, the retailer now projects adjusted earnings in a range of $8.85 to $9.15 per share on revenues between $49.3 billion and $50.8 billion, with comparable sales decline of 1.0 to 4.0 percent. The Street expects earnings of $9.16 per share on revenues of $51.05 billion for the year.

For fiscal 2025, the company is targeting enterprise revenue between $53.5 billion and $56.5 billion.

Best Buy's board of directors also approved a 26 percent increase in the regular quarterly dividend to $0.88 per share, payable on April 14, 2022, to shareholders of record as of the close of business on March 24, 2022.

In addition, the company's board of directors approved a new $5.0 billion share repurchase authorization, replacing the existing authorization dated February 2021, which had $1.6 billion in repurchases remaining at the end of fiscal 2022.

BJ's Wholesale announced Thursday that net income for the fourth quarter grew to $107.57 million or $0.78 per share from $95.88 million or $0.69 per share in the prior-year quarter.

Excluding items, adjusted net income was $0.80 per share, compared to $0.70 per share in the year-ago quarter.

Total revenues for the quarter increased 10.4 percent to $4.26 billion from $3.86 billion in the same quarter last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.74 per share on revenues of $4.38 billion for the quarter. Analysts' estimates typically exclude special items.

Net sales grew 10.4 percent to $4.26 billion and membership fee income increased 9.5 percent to $94.30 million from last year. Digitally-enabled sales growth was 19 percent.

Total comparable club sales increased 8.8 percent, reflecting two-year stacked comp of 21.8 percent. Comparable club sales, excluding the impact of gasoline sales, grew 0.9 percent, reflecting two-year stacked comp of 16.8 percent.

Looking ahead, BJ's expects earnings per share to remain flat year over year after giving effect to the pending Burris acquisition of assets on net sales growth in the mid-single digit range, with merchandise comparable club sales growth in the low-single digit range.

The Street is looking for earnings of $3.39 per share on revenues of $17.87 billion for the year.

Meanwhile, discount retailer Big Lots reported net income of $49.84 million or $1.63 per share, down from $97.99 million or $2.59 per share in the prior-year quarter. Excluding items, adjusted earnings for the quarter were $1.75 per share.

Net sales for the quarter edged down 0.6 percent to $1.73 billion from $1.74 billion in the same quarter last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.89 per share on revenues of $1.72 billion for the quarter. Analysts' estimates typically exclude special items.

Looking ahead to the first quarter, the company expects earnings in a range of $1.10 to $1.20 per share on low double-digit decline in comparable sales.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $1.28 per share for the quarter. Analysts' estimates typically exclude special items.

For fiscal 2022, the company now projects both comparable sales and gross margin rate to be approximately flat to the prior year.

Big Lots also reaffirmed its long-term sales objective of $8 billion to $10 billion with 6 to 8 percent operating margin. It is also on track to open 50 net new stores in 2022 with a long-range incremental store goal of more than 500 stores.

On Tuesday, Big Lots' Board of Directors declared a quarterly cash dividend of $0.30 per common share for the first quarter of fiscal 2022, payable on April 1, 2022, to shareholders of record as of the close of business on March 18, 2022.

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