Electronics retailer Best Buy Co. Inc. (NYSE: BBY) reported fourth quarter and full year earnings this morning. For the quarter, the company reported adjusted EPS of $2.47 on revenue of $16.63 billion. The consensus estimates called for EPS of $2.16 on revenue of $17.2 billion.
On a GAAP basis, Best Buy reported a quarterly EPS loss of -$4.89, which includes a $2.6 billion charge related to the purchase of a profit share agreement with London-listed Carphone Warehouse Group plc, restructuring charges, and a non-cash impairment charge for a write-off of goodwill in Europe. Same-store sales fell -2.4% in the quarter, compared with a decline of -4.7% in same-store sales in the same period a year ago.
The company also said it is seeking to save $800 million by its 2015 fiscal year, including spending reductions of $250 million in the current fiscal year. Best Buy will close 50 big box stores in the US over the three-year period, which it said would save $300 million. Another $300 million in savings will come from firing about 400 employees and making other changes in the corporate and support structure of the company, and the final $200 million will come from reductions in cost of goods sold.
Best Buy also intends to make some major changes in its store strategy:
Best Buy’s retail store strategy is to increase points of presence, while decreasing overall square footage, for increased flexibility in a multi-channel environment. The company intends to remodel key stores with a new Connected Store format in fiscal 2013, and to continue to build out the successful Best Buy Mobile small format stores throughout the U.S. … The company expects total big box square footage in … test markets to be reduced by almost 20 percent through store downsizing and closures, while points of presence will increase by more than 20 percent.
The company also plans to open another 100 of its Best Buy Mobile small-format stores this year, with a goal of having 600-800 such stores in operation by 2016.
Best Buy’s guidance for the current fiscal year includes revenue of $50-$51 billion, slightly lower than the consensus estimate of $51.9 billion and a same-store sales decline of -2% to -4%. Adjusted EPS is forecast to be $3.50-$3.80, with the consensus estimate from analysts at $3.70.
Shares of Best Buy are down about -0.4% in the pre-market, at $26.51 in a 52-week range of $21.79-$32.85.