Best Buy Co., Inc. (BBY) stock is dropping today: Here’s Why

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Best Buy Co., Inc. (BBY) stock announced Q3 FY22 financial results today on November 23, 2021. The stock in response to financial results saw a downtrend of 15.84% to drop at $115.96 a share at the time of this writing. In the previous trade, the stock was green and went high by 1.37% at closing. Let’s dig in to understand more of it.

Domestic Financial Results of BBY stock:

  • The domestic revenue of the BBY stock reached $10.99 billion in the reported quarter. This represents an increase of 1.2% over the year. This increase is mainly due to 2.0% sales growth. The permanent store closure in the previous year however partially contributed to the loss of revenue.
  • Domestic online revenue of the BBY stock declined by 10.1% on a comparable basis to drop at $3.44 billion. Online revenue declined by 31.3% as compared to 35.2% last year.
  • The domestic gross profit rate of the BBY stock was 23.4%, 0.6% lower than last year. Lower product margin, increased inventory shrink, and high product damages, as well as returns last year, contributed to this fall.
  • BBY stock spent $1.96 billion in GAAP selling, general and administrative expenses in the reported quarter. This represents 17.9% of the revenue.

International Financial results of BBY stock:

  • The company reported $925 million in international revenue, 7.8% lower than the last year. The 3.0% sales decline in Canada and loss of revenue from exciting Mexico resulted in a decrease in the international revenue.
  • The International GAAP gross profit rate increased from 19.0% last year to 25.0% in the reported quarter. The gross profit on a non-GAAP basis was 25.0% versus 22.6% last year. Improved product margins in Canada and sales mixing out of Mexico resulted in this rise.
  • BBY stock spent $171 million in selling, general and administrative expenses in the reported quarter. These expenses were $175 million in the same period as the previous year.

Dividend and Share Repurchase Program:

In the reported quarter, BBY stock paid $405 million in share repurchase programs and $172 million in dividends to the shareholders. The company paid $2.25 billion to shareholders via share repurchases as well as dividends on a year-to-date basis.

BBY stock today also announced the payment approval of a quarterly cash dividend of $0.70 per common share. The stock will pay dividends on January 4, 2022, to the shareholders and the record date is December 14, 2021.

Wrap Up:

Investors responded negatively to the release of third-quarter financial results by the Best Buy stock due to a decline in the gross margin.

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