Best Buy announces $3 billion buyback plan, shares spike

  • Best Buy‘s holiday quarter beat on the top and bottom lines.
  • The big-box retailer’s board approved a new $US3 billion share buyback plan.
  • Shares were up 11% early Wednesday.
  • Watch Best Buy trade live.

Best Buy reported quarterly earnings and revenue on Wednesday that topped analysts’ expectations, sending shares higher by 11% ahead of the opening bell.

The Minnesota-based retailer said its board authorised a $US3 billion share buyback plan, and plans to spend between $US750 million and $US1 billion on share buybacks during its fiscal year 2020.

Share repurchases are on track to top a fresh record this year, according to Bank of America Merrill Lynch. Firms announced more than $US1.1 trillion in buybacks last year.

Here’s what Best Buy reported, compared with what Wall Street was expecting, according to analysts surveyed by Bloomberg.

  • Adjusted earnings per share (EPS): $US2.72 versus $US2.56 estimated
  • Revenue: $US14.8 billion versus $US14.69 billion estimated

The company said its comparable sales grew 3% in the fourth quarter, and 4.8% for the full year. It also raised its quarterly dividend by 11%, to $US0.50 a share.

Best Buy has fallen 16% over the past year, underperforming the SPDR S&P retail exchange-traded fund which has gained 1%. However, the retailer is up 13% this year.

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