On Sept. 18, Best Buy
- Back-to-school shoppers picked up big-ticket items -- notebook computers, televisions, and video games -- and helped drive sales up 15.1% and comps up 3.6%.
- The gross margin dropped mainly from the addition of the China business that carries low gross-profit rates.
- The company reduced its outstanding shares by 8%, which boosted earnings per share 17%.
- Best Buy is a three- out of five-star stock in The Motley Fool's CAPS community. It's struggling rival, Circuit City
(NYSE:CC) , is seeking charm tomorrow when it releases quarterly results, but CAPS investors aren't too bullish; that stock earns only one star.
(Figures are in millions, except per-share data.)
Income Statement Highlights
|
Q2 08 |
Q2 07 |
Change |
|
|---|---|---|---|
|
Sales |
$8,750.0 |
$7,603.0 |
15.1% |
|
Net Profit |
$250.0 |
$230.0 |
8.7% |
|
EPS |
$0.55 |
$0.47 |
17.0% |
|
Diluted Shares |
456.2 |
496.5 |
(8.1%) |
Get back to basics with the income statement.
Margin Checkup
| Margin |
Q2 08 |
Q2 07 |
Change* |
|---|---|---|---|
|
Gross |
24.5% |
25.0% |
(0.6) |
|
Operating |
4.6% |
4.3% |
0.2 |
|
Net |
2.9% |
3.0% |
(0.2) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 08 |
Q2 07 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$1,511.0 |
$2,668.0 |
(43.4%) |
|
Accounts Rec. |
$554.0 |
$483.0 |
14.7% |
|
Inventory |
$4,650.0 |
$4,049.0 |
14.8% |
|
Liabilities |
Q2 08 |
Q2 07 |
Change |
|---|---|---|---|
|
Accounts Payable |
$4,312.0 |
$3,858.0 |
11.8% |
|
Long-Term Debt |
$600.0 |
$184.0 |
226.1% |
The balance sheet reflects the company's health.
Cash Flow Highlights
Electronics don't work without power in, and due diligence doesn't work without a cash flow statement.
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