Best Buy, Macy's Q4 Results Top Estimates; Big Lots Slips To Loss In Q4

Retailers Best Buy Co., Inc. (BBY) and Macy’s, Inc. (M) reported on Thursday profits for the fourth quarter that decreased from last year, but results for the quarter topped analysts’ estimates. Meanwhile, Big Lots, Inc. (BIG) slipped to a loss, but the loss came in narrower than expectations.

Best Buy provided weak guidance for the full-year 2023, but approved a 5 percent increase in quarterly dividend. Big Lots also declared a quarterly dividend.

In pre-market activity on the NYSE, Best Buy shares are down $2.01 or 2.44 percent to trade at $80.53, Macy’s shares are surging $1.32 or 6.46 percent to trade at $21.75 and Big Lots shares are up $0.02 or 0.15 percent to trade at $13.75.

Best Buy’s net earnings for the quarter decreased to $495 million or $2.23 per share from $626 million or $2.62 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $2.61 per share, compared to $2.73 per share a year ago.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $2.11 per share for the quarter. Analysts’ estimates typically exclude special items.

Enterprise revenues for the quarter declined 3.4 percent to $14.74 billion from $16.37 billion in the same quarter last year. Analysts had a consensus revenue estimate of $14.72 billion.

Enterprise comparable sales decreased 9.3 percent, compared to a decline of 2.3 percent last year.

Domestic revenue decreased 9.8 percent from last year to $13.53 billion, mainly driven by comparable sales decline of 9.6 percent. Domestic online revenue of $5.14 billion declined 13.0 percent from last year.

International revenue also declined 12.2 percent to $1.2 billion, driven primarily by comparable sales drop of 5.7 percent and the negative impact of approximately 570 basis points from foreign currency exchange rates.

Looking ahead to fiscal 2023, the retailer now 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 $6.71 per share on revenues of $45.73 billion for the year. Analysts’ estimates typically exclude special items.

Best Buy also announced its board of directors approved a 5 percent increase in the regular quarterly dividend to $0.92 per share, payable on April 13, 2023, to shareholders of record as of the close of business on March 23, 2023.

Omni-channel fashion retailer Macy’s reported a fourth-quarter net income of $508 million or $1.83 per share, lower than $742 million or $2.44 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $524 million or $1.88 per share, compared to $745 million or $2.45 per share in the year-ago quarter.

Net sales for the quarter declined 4.6 percent to $8.26 billion from $8.67 billion in the same quarter last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.57 per share on net sales of $8.25 billion for the quarter. Analysts’ estimates typically exclude special items.

Comparable sales were down 3.3 percent on an owned basis and down 2.7 percent on an owned-plus-licensed basis. Digital sales decreased 9 percent, and brick-and-motar sale were down 2 percent.

Gross margin declined 240 basis points to 34.1 percent, due to promotional and planned markdowns.

Looking ahead to fiscal 2023, the company now projects adjusted earnings in a range of $3.67 to $4.11 per share on net sales between $23.7 billion and $24.2 billion, with comparable owned plus licensed sales decline of 4 to 2 percent.

The Street is looking for earnings of $3.84 per share on net sales of $24.29 billion for the year.

Meanwhile, discount retailer Big Lots reported a net loss of $12.46 million or $0.43 per share for the fourth quarter, compared to net income of $49.84 million or $1.63 per share in the prior-year quarter.

Excluding items, adjusted loss for the quarter were $0.28 per share, compared to adjusted earnings of $1.75 per share in the year-ago quarter.

Net sales for the quarter declined 10.9 percent to $1.54 billion from $1.73 billion in the same quarter last year, driven by a comparable sales decrease of 13.0 percent.

On average, nine analysts polled by Thomson Reuters expected the company to report a loss of $0.85 per share on revenues of $1.55 billion for the quarter. Analysts’ estimates typically exclude special items.

Looking ahead to the first quarter, the company expects comparable sales to decline in the low to mid-teens range.

Big Lots’ Board of Directors also declared a quarterly cash dividend of $0.30 per common share for the first quarter of fiscal 2023, payable on March 31, 2023, to shareholders of record as of the close of business on March 17, 2023.

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