Is Best Buy a Buy?: Fool by Numbers

On June 19, Best Buy (NYSE: BBY  ) released first-quarter earnings for the period ended June 2.

• The net sales increased by 13.9% to $7.9 billion. Same-store sales moved ahead 3.0%, and online revenue shot up 20%.
• Gross profit margin dipped by 150 bps to 23.9%. According to the company, this decline is due to lower gross profit rate from the Chinese business acquired last June and lower margins from notebook computers and gaming hardware.
• The company repurchased approximately 8.7 million shares of its common stock at an average price of $47.21 per share for a total of $412 million.
• The company lowered its fiscal 2008 earning per diluted share guidance to a range of $2.95 to $3.15.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$7,927	$6,959	13.9%
Net Profit	$192	$234	(17.9%)
EPS	$0.39	$0.47	(17%)
Diluted Shares	491.5	500.8	(1.9%)

Get back to basics with the income statement.

Margin Checkup

	Q1 2008	Q1 2007	Change*
	23.9%	25.4%	(1.5)
	3.4%	4.8%	(1.5)
	2.4%	3.4%	(0.9)

*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2008	Q1 2007	Change
Cash + ST Invest.	$2,802	$2,326	20.5%
Accounts Rec.	$476	$409	16.4%
Inventory	$4,298	$3,737	15%
Liabilities	Q1 2008	Q1 2007	Change
Accounts Payable	$3,957	$3,055	29.5%
Total Debt	$665	$598	11.2%

The balance sheet reflects the company's health.

Cash Flow Highlights
You wouldn't buy a receiver without having speakers to use, and you can't look at the complete financial performance without a cash flow statement.

Free cash flow is a Fool's best friend.

Related Foolishness:

• Before the Call: Will Best Buy Deliver?
• Circuit City Tunes Up Again
• Foolish Forecast: Growth at Conn's?

Best Buy is a Motley Fool Stock Advisor selection. To be a part of the newsletter that's handily outperforming the market, sign up today for you free 30-day trial.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.