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Best Buy’s shares jump on earnings beat

Friday, May 31, 2024

Today’s headlines

What’s happening: Shares of Best Buy surged on Thursday, after the company reported results for its first quarter.

What happened: The electronics retailer reported stronger-than-expected earnings for its fiscal first quarter on Thursday.

However, Best Buy failed to meet sales estimates and announced a significant restructuring charge in the quarter.

How were the results: The company reported a decline in sales for its recent quarter.

  • Sales fell to $8.85 billion, from $9.47 billion in the year-ago quarter, missing consensus estimates of $8.96 billion.
  • Adjusted earnings came in at $1.20 per share, beating Wall Street expectations of $1.08 per share.

Why it matters: Sticky inflation has been weighing on discretionary spending, which has impacted Best Buy’s overall sales.

The company’s quarterly domestic revenues contracted by 6.8% year-over-year to $8.20 billion, while comparable sales slipped 6.1%. Domestic online revenues fell 6.1% on a comparable basis to $2.52 billion.

International revenue fell 3.3% to $644 million, while international gross profits narrowed to 22.8%, from 23.7% in the year-ago quarter.

Best Buy incurred restructuring charges of $15 million related to an enterprise-wide restructuring initiative during the quarter.

The company announced a regular quarterly dividend of 94 cents per share.

Management reiterated their sales and adjusted earnings forecast of $41.3 billion to $42.6 billion and $5.75 to $6.20 per share, respectively, for fiscal 2025. They projected a decline in comparable sales of around 3%.

How shares responded: Best Buy’s shares surged 13.4% to close at $81.55 on Thursday, following the release of quarterly results. The stock has gained around 13% over the past month.

What to watch: Investors will continue monitoring consumer discretionary spending, which is expected to significantly impact the company’s overall results ahead.

The markets today

The Canadian dollar will be in focus today ahead of a couple of major economic reports

Context: The CAD/USD forex pair moved higher on Thursday, as investors assessed the latest economic data.

Details: Investors continued monitoring the Bank of Canada’s monetary policy outlook. The latest data signalling continued price pressures lowered speculations of the central bank cutting interest rates in June. Producer prices surged by 1.5% in April, compared to a 0.9% rise in March, and came in much higher than market expectations of 0.8%.

Data released on Thursday showed Canada’s current account deficit widened to C$5.4 billion in the first quarter, from C$4.5 billion in the prior period. The figure was just shy of market estimates of C$5.5 billion.

Average weekly earnings of non-farm payroll employees rose by 4.2% year-over-year to $1,235 in March. CFIB’s Business Barometer also rose to 56.4 in May, from 47.6 a month ago.

Weakness in the price of crude oil, one of Canada’s major exports, limited the overall gains for the loonie. WTI crude oil for July delivery declined $1.32 to close at $77.91 per barrel on Thursday.

Some strength in the greenback exerted pressure on the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.1% to 104.72 on Thursday.

The CAD/USD forex pair rose more than 0.2% to 1.3680 on Thursday. The S&P/TSX Composite Index added 0.79% to settle at 22,071.71.

What to watch: Investors await the release of data on GDP growth rate and government budget value from Canada today. The Canadian GDP, which grew by an annualised rate of 1%, is expected to expand by 2.2% in the first quarter. Analysts expect Canada’s GDP growth to remain unchanged in March, from the 0.2% growth recorded in the prior month.

Canada’s government budget surplus shrank to C$8.34 billion in February, from C$9.53 billion in the year-ago period. The country is now expected to post a budget deficit of C$39 billion for March.

Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.59%, 0.13%, 0.55% and 0.59%, respectively.

The news shaping the markets

The US Treasury Department announced sanctions on two African companies that are related to Russia’s Wagner Group. The news sent the safe-haven US dollar index higher in forex trading this morning.


Singapore bank loans declined to S$804.3 billion in April, versus a 15-month high of S$807.8 billion a month ago, exerting pressure on the SGD/USD forex pair.


China’s official NBS manufacturing PMI fell to 49.5 in May, from 50.4 in the prior month. The figure coming in below market expectations of 50.5 sent the CNY/USD pair lower in forex trading this morning.


Japan’s retail sales grew by 2.4% year-over-year in April, compared to an 1.1% gain in March. The latest reading also topped market expectations for a 1.9% increase, lending support to the JPY/USD forex pair.


Argentina’s consumer confidence indicator climbed to 38.3 in May, from 37.17 a month ago. The region’s consumer confidence hitting the highest level in the year sent the ARS/USD pair higher in forex trading this morning.

What else to watch today

France’s payroll employment, producer prices, household consumption and inflation rate, Germany’s retail sales and import prices, South Africa’s money supply M3, private sector credit, balance of trade, total vehicle sales and manufacturing PMI, Australia’s commodity prices and CoreLogic home value index, Turkey’s GDP growth rate, Italy’s gross domestic product, industrial sales, new passenger car registrations and inflation rate, Spain’s current account, UK’s consumer credit, net mortgage approvals, mortgage lending, money supply M4, net lending to individuals and Nationwide house price index, Eurozone’s inflation rate, India’s bank loan growth, deposit growth, foreign exchange reserves, infrastructure output, GDP growth rate and central government budget value, Mexico’s Foreign exchange reserves and government budget value, US core PCE prices, personal income, personal spending, Chicago business barometer, Baker Hughes crude oil rigs and Baker Hughes total rigs, as well as Russia’s corporate profits and money supply M2.


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