15.02.2008 13:00:00
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Best Buy Updates Fiscal 2008 EPS Guidance to Range of $3.05 to $3.10
Based on lower-than-expected revenue growth in fiscal January coupled
with its near-term outlook, Best Buy Co., Inc. (NYSE: BBY) reported
today that it now expects its fiscal 2008 earnings per diluted share to
be $3.05 to $3.10 for the fiscal year which concludes on March 1, 2008,
an approximately 10-percent increase compared with its EPS of $2.79 for
the prior year. The company previously had provided earnings guidance of
$3.10 to $3.20 per share for fiscal 2008.
"Our December revenue results were in line
with our expectations. Soft domestic customer traffic in January,
coupled with our near-term outlook, now indicate that our fourth-quarter
revenue will fall short of our planned targets,”
said Brad Anderson, vice chairman and chief executive officer of Best
Buy.
The company, which reported a comparable store sales gain of 1.5 percent
for fiscal December, now expects comparable store sales to decline
modestly for the fiscal fourth quarter, reflecting changes in the macro
environment. As a result, the company is projecting nearly $40 billion
in revenue for fiscal 2008, including an annual comparable store sales
gain of 2.5 percent to 3 percent, compared with previous guidance of
approximately 4 percent.
The company now anticipates lower revenue for the fiscal fourth quarter
in categories such as home theater, MP3 devices, digital imaging and
video gaming (which experienced industry-wide temporary inventory
shortages in the United States during January), compared with its prior
expectations. These volume reductions are expected to be partially
offset by higher-than-expected volumes from notebook computers, which
are benefiting from an expanded assortment and continued customer
interest in mobile computing.
"The macro-economic environment grew more
challenging after the holidays,” said Jim
Muehlbauer, enterprise CFO (interim). "Our
post-holiday results are not going to be what we originally expected.
Yet our strategic results are favorable; our most recent data shows that
customer satisfaction improved, and we built market share in key
categories such as home theater, computing and gaming.”
Muehlbauer added, "Our optimism and our point
of view about the future has not changed, and we continue to operate our
business with a long-term perspective. That perspective guides our
decision to continue expanding our footprint globally with new stores.
Furthermore, we anticipate returns on our new store investments to be
similar to what we’ve seen historically.” Best Buy Continues to Focus on Growth Opportunities
The company said that it plans to open approximately 130 to 160 new
stores globally during its 2009 fiscal year in order to increase
customer convenience and to boost market share while providing the
latest elements in store design. The company said it expects its total
retail square footage to grow 10 percent to approximately 51 million
square feet by the end of fiscal 2009.
"The challenges we’re
solving for consumers in this fascinating industry have never been
larger, and we believe we have the solution for them in our people,”
Anderson said. "Our confidence in our
employees has never been stronger. We’re
consciously choosing not to pull back on our investments, even in a
difficult economy, because we are making the bet that the opportunities
are rich, over the longer term. When the U.S. economy regains its
momentum, we believe that our results will show these to be good
investments.”
The company’s growth plans also include
operational enhancements and expansions into new categories or
businesses where consumers have shown interest.
"We are extending our Best Buy Mobile
experience, through our partnership with The Carphone Warehouse Group,
to the majority of our U.S. Best Buy stores over the next 18 months. We
want more customers to enjoy improved service and selection in mobile
phones,” said Brian Dunn, president and chief
operating officer. "We have achieved number
one retail market share in the consumer laptop market with the best
assortment and employees in the industry. Collaborative relationships
with all of our vendors—including HP and
Toshiba—have helped us dramatically improve
our computing customer experience, resulting in share increases and
continued growth. We’ll add to that strength
in fiscal 2009 as we expect to operate 600 stores with Apple computer
products and services as well as continuing our relationship with Dell.
We’ll also reset the GPS area to maximize the
customer experience. Last, to continue to foster customer loyalty, we
intend to enhance our Reward Zone program benefits for our best
customers, add gaming and music experiences in the center of our stores,
enhance our Web sites and test several new categories.”
Dunn added, "Our employees’
expertise and their commitment to serving our customers is ultimately
why we feel so confident in our growth opportunities, including
expanding our footprint. Our market leadership allows us to invest in
new areas, domestically and internationally, which we believe will help
us continue to build on our long track record of growth.” Company Intends to Operate More Than 1,000 U.S. Best Buy Stores in
Fiscal 2009
In fiscal 2009, the company expects to open 85 to 100 new Best Buy
stores in the United States. Best Buy estimates that approximately 75
percent of these new stores will be in the 30,000-square-foot format. It
also anticipates 20 percent of the new stores will be in the
45,000-square-foot format with the balance in the 20,000-square-foot
format. The majority of the new stores are projected to be opened in
markets where Best Buy already has an established presence. In addition,
the company expects to relocate four U.S. Best Buy stores during fiscal
2009. The majority of the new U.S. stores are scheduled to open
periodically throughout the company’s first
three fiscal quarters so that the new stores are open in time for the
holiday shopping season.
Dunn said, "We are focused on driving the
greatest amount of shareholder value over the long term. We are proud
that our plans have us crossing the 1,000-store mark in fiscal 2009 and
believe the opening of new stores continues to be a great investment.”
He concluded, "We believe that the economic
environment will remain challenging in the near term. Historically,
times like these have created the best opportunities to distance
ourselves from the competition. Accordingly, we plan to move faster in
those areas where we can provide a differentiated experience to
customers and deliver long-term value for our shareholders.”
The company also commented that it plans to open five to 10 additional
Pacific Sales Kitchen and Bath Centers over the coming fiscal year. The
stores, opening in western states, will offer convenient locations for
customers and career opportunities for employees. The company currently
operates 17 Pacific Sales stores, which have an average of approximately
30,000 square feet.
In total, Best Buy estimates that its U.S. retail square footage will
increase to approximately 40 million square feet by the end of fiscal
2009, compared with approximately 37 million square feet projected for
the end of fiscal 2008.
Best Buy Plans to Expand International Retail Square Footage at Least
12% Next Year
Best Buy’s fiscal 2009 plan includes the
addition of approximately 40 to 50 new stores in its international
segment in order to reach more consumers in fast-growing markets with
its differentiated customer experience.
The company anticipates opening approximately 12 new stores in Canada,
including approximately six Future Shop stores and six Best Buy stores.
The new Future Shop stores will open at intervals throughout fiscal
2009, and the Best Buy stores are scheduled to open in the middle of the
fiscal year. The company also plans to close one Future Shop store and
relocate six Future Shop stores in the coming fiscal year.
In China, the company plans to add approximately 20 to 25 new Five Star
stores throughout fiscal 2009. Additionally, the company expects to open
five to eight additional Best Buy locations in China, based on consumers’
response to its first location in Shanghai. As previously reported, Best
Buy plans to open two to five new stores in Mexico in the second half of
fiscal 2009. The company now projects that it will open its first one or
two stores in Turkey in the early part of fiscal 2010. The international
segment’s retail square footage is expected
to increase to approximately 11 million square feet by the end of fiscal
2009, representing nearly 22 percent of the company’s
total retail square footage.
"The international team has made great
progress in Canada and China as well as with our partnership with The
Carphone Warehouse Group. We intend to draw on all of those experiences
as we enter Mexico and Turkey,” said Bob
Willett, CEO of Best Buy International and enterprise CIO. "In
the coming year, we will put more focus on the opening of stores in new
countries where we see unmet customer needs. Our entrances into Mexico
and Turkey, which will require up-front investment, are a critical part
of our long-term journey and are inspired by the same strategy that
drives our domestic growth.” Best Buy’s New Stores to Create 12,000
Retail Jobs
Best Buy’s fiscal 2009 store expansion plans
are expected to bring more than 12,000 new retail management, sales and
services positions to communities in its markets. The leading retailer,
which annually gives 1.5 percent of its pre-tax profits to charitable
organizations, expects to employ more than 150,000 people worldwide by
the end of fiscal 2009.
Dunn said, "The relationships between our
employees and our customers are the foundation for our growth. Combining
the resources of a $40 billion enterprise with the unique local insights
from our employees across the globe is both our challenge, and our
opportunity. By focusing on our customers, we believe we can achieve
even greater heights.”
Best Buy’s financial results, store counts
and other news releases can be found on the Internet at the company’s
Web site, www.BestBuy.com, by
clicking on the "For Our Investors”
link. They also can be accessed via Business Wire’s
Web site at www.businesswire.com.
On April 2, 2008, the company expects to report fiscal fourth-quarter
results, along with more details about its expectations for fiscal 2009.
Store Count and Fiscal 2009 Expansion Summary1
Store Count
Net New Stores Location/Brand
FY08E
FY09E Low-End
FY09E High-End
U.S./Best Buy
917
85
100
U.S./Pacific Sales
17
5
10
U.S./Magnolia Audio Video
13
-
-
U.S./Geek Squad Standalone
7
-
-
Domestic
954
90
110
Canada/Future Shop
131
5
5
Canada/Best Buy
51
6
6
China/Five Star
159
20
25
China/Best Buy
1
5
8
Mexico/Best Buy
-
2
5
International
342
38
49
1,296
128
159 1 All figures estimated at period end
Forward-Looking and Cautionary Statements:
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 as contained in
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 that reflect management’s
current views and estimates regarding future market conditions, company
performance and financial results, business prospects, new strategies,
the competitive environment and other events. You can identify these
statements by the fact that they use words such as "anticipate,” "believe,” "estimate,” "expect,” "intend,” "project,” "plan,” "outlook,” and
other words and terms of similar meaning. These statements involve a
number of risks and uncertainties that could cause actual results to
differ materially from the potential results discussed in the
forward-looking statements. Among the factors that could cause actual
results and outcomes to differ materially from those contained in such
forward-looking statements are the following: general economic
conditions, acquisitions and development of new businesses,
divestitures, product availability, sales volumes, pricing actions and
promotional activities of competitors, profit margins, weather, changes
in law or regulations, foreign currency fluctuation, availability of
suitable real estate locations, the company’s
ability to react to a disaster recovery situation, and the impact of
labor markets and new product introductions on overall profitability. A
further list and description of these risks, uncertainties and other
matters can be found in the company’s annual
report and other reports filed from time to time with the Securities and
Exchange Commission, including, but not limited to, Best Buy’s
Annual Report on Form 10-K filed with the SEC on May 2, 2007. Best Buy
cautions that the foregoing list of important factors is not complete
and assumes no obligation to update any forward-looking statement that
it may make.
About Best Buy Co., Inc.
Best Buy Co., Inc. (NYSE:BBY) operates a global portfolio of brands with
a commitment to growth and innovation. Our employees strive to provide
customers around the world with superior experiences by responding to
their unique needs and aspirations. We sell consumer electronics,
home-office products, entertainment software, appliances and related
services through nearly 1,300 retail stores across the United States,
throughout Canada and in China. Our multi-channel operations include:
Best Buy (BestBuy.com, BestBuy.ca and BestBuy.com.cn), Future Shop
(FutureShop.ca), Geek Squad (GeekSquad.com and GeekSquad.ca), Pacific
Sales Kitchen and Bath Centers (PacificSales.com), Magnolia Audio Video
(Magnoliaav.com), Jiangsu Five Star Appliance Co. (Five-Star.cn) and
Speakeasy (Speakeasy.net). Best Buy supports the communities in which
its employees work and live through volunteerism and grants that benefit
children and education.
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S&P 500 | 6 034,91 | -0,30% |