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What Wall Street Expects from Best Buy’s Q4 Results

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Expectations for the fourth quarter

Best Buy (BBY) is scheduled to report its results for the fourth quarter of fiscal 2019, which ended on February 2, on February 27. The leading consumer electronics retailer beat analysts’ revenue and earnings expectations in each of the first three quarters of fiscal 2019. Overall, the company’s revenue grew 4.8% to $28.1 billion in the first nine months of fiscal 2019.

Best Buy expects its fiscal fourth-quarter revenue in the range of $14.4 billion–$14.8 billion and same-store sales growth in the range of 0.0%–3.0%. Analysts expect Best Buy’s fourth-quarter revenue to decline 4.3% to $14.7 billion. The forecast decline in revenue reflects an expected slowdown in some categories, like iPhones, and a tough comparison with a strong fourth quarter in the previous fiscal year.

The company expects its fourth-quarter EPS in the range of $2.48–$2.58. Analysts forecast that Best Buy’s adjusted EPS will increase 6.2% to $2.57.

Under its “Best Buy 2020: Building the New Blue” strategy, the company is undertaking steps to improve its presence in growth categories like smart home. Best Buy is also deepening its relationship with customers through services like Total Tech Support and Assured Living.

The company is also focusing on improving its productivity and controlling costs to redirect savings toward growth investments.

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Full-year guidance

Best Buy expects its full-year fiscal 2019 revenue in the range of $42.5 billion–$42.9 billion with same-store sales growth in the range of 4.0%–5.0%. The company expects its 2019 adjusted EPS to grow 15%–17% to $5.09–$5.19. Analysts expect Best Buy’s adjusted EPS to rise 17.2%–$5.18 on revenue growth of 1.5%–$42.8 billion in fiscal 2019. A lower effective tax rate and a reduced share count as a result of share repurchases are expected to boost Best Buy’s fiscal 2019 EPS growth.

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