Best Buy's Buyback Boosts Profits: Fool by Numbers (BBY)

Best Buy's Buyback Boosts Profits: Fool by Numbers

By Motley Fool Contributors | More Articles
September 19, 2007 | Comments (0)

On Sept. 18, Best Buy (NYSE: BBY ) released second-quarter earnings for the period ended Sept. 1.

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

	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)

*Expressed in percentage points.

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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Fool by Numbers gives 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.

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