Best Buy, Dollar Tree Q1 Earnings Top Estimates

Retailers Best Buy Co., Inc. (BBY) and Dollar Tree Inc. (DLTR) reported on Thursday profits for the first quarter that decreased from last year, but results topped analysts’ estimates. However, net sales missed estimates.

Best Buy maintained its guidance for the full-year 2023, while Dollar Tree slashed its earnings outlook for the full-year 2023.

In pre-market activity, Best Buy shares are up $4.05 or 5.86 percent to trade at $73.20 on the NYSE, while Dollar Tree’s shares are plunging $18.85 or 12.13 percent to trade at $136.50 on the Nasdaq.

Electronics retailer Best Buy’s net earnings for the first quarter decreased to $244 million or $1.11 per share from $341 million or $1.49 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $1.15 per share, compared to $1.57 per share a year ago.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $1.11 per share for the quarter. Analysts’ estimates typically exclude special items.

Enterprise revenues for the quarter declined 11.1 percent to $9.47 billion from $10.65 billion in the same quarter last year. Analysts had a consensus revenue estimate of $9.52 billion.

Enterprise comparable sales decreased 10.1 percent, compared to a decline of 8.0 percent last year.

Domestic revenue decreased 11.0 percent from last year to $8.80 billion, mainly driven by comparable sales decline of 10.4 percent. Domestic online revenue of $2.69 billion declined 12.1 percent from last year.

International revenue also declined 11.6 percent to $666 million, driven primarily by comparable sales drop of 5.5 percent and the negative impact of approximately 610 basis points from foreign currency exchange rates.

Looking ahead to fiscal 2023, the retailer still projects adjusted earnings in a range of $5.70 to $6.50 per share on revenues between $43.8 billion and $45.2 billion, with a comparable sales decline of 3.0 to 6.0 percent.

On average, 28 analysts polled by Thomson Reuters expect the company to report earnings of $6.17 per share on revenues of $45.53 billion for the year. Analysts’ estimates typically exclude special items.

Best Buy also announced its board of directors authorized a regular quarterly dividend to $0.92 per share, payable on July 6, 2023, to shareholders of record as of the close of business on June 15, 2023.

Meanwhile, Dollar Tree reported that net income for the first quarter declined to $299.0 million or $1.35 per share from $536.4 million or $2.37 per share in the prior-year quarter. Excluding items, adjusted earnings for the quarter were $1.47 per share, compared to $2.27 per share last year.

Net sales for the quarter grew 6.1 percent to $7.32 billion from $6.90 billion in the same quarter last year. Same-Store Sales were up 4.8 percent.

The Street expected the company to report earnings of $1.52 per share on revenues of $7.28 billion for the quarter.

Looking ahead to the second quarter, the company estimates earnings in a range of $0.79 to $0.89 per share on consolidated net sales between $7.0 billion and $7.2 billion, based on a mid-single-digit increase in same-store sales for the combined enterprise.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $1.22 per share on sales of $7.15 billion for the quarter. Analysts’ estimates typically exclude special items.

For fiscal 2023, the company now projects earnings in a range of $5.73 to $6.13 per share on consolidated net sales between $30.0 billion and $30.5 billion, based on a low to mid-single-digit increase in same-store sales and 3.0 to 3.5 percent selling square footage growth.

Previously, the company expected earnings in a range of $6.30 and $6.80 per share on consolidated net sales between $29.9 billion and $30.5 billion, based on a low to mid-single-digit increase in same-store sales and 3.0 to 3.5 percent selling square footage growth.

The Street is looking for earnings of $6.68 per share on sales of $30.37 billion for the year.

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