Best Buy announces $3 billion buyback plan, shares spike
- Best Buy's holiday quarter beat on the top and bottom lines.
- The big-box retailer's board approved a new $3 billion share buyback plan.
- Shares were up 11% early Wednesday.
- Watch Best Buy trade live.
Best Buy reported quarterly earnings and revenue on Wednesday that topped analysts' expectations, sending shares higher by 11% ahead of the opening bell.
The Minnesota-based retailer said its board authorized a $3 billion share buyback plan, and plans to spend between $750 million and $1 billion on share buybacks during its fiscal year 2020.
Share repurchases are on track to top a fresh record this year, according to Bank of America Merrill Lynch. Firms announced more than $1.1 trillion in buybacks last year.
Here's what Best Buy reported, compared with what Wall Street was expecting, according to analysts surveyed by Bloomberg.
- Adjusted earnings per share (EPS): $2.72 versus $2.56 estimated
- Revenue: $14.8 billion versus $14.69 billion estimated
The company said its comparable sales grew 3% in the fourth quarter, and 4.8% for the full year. It also raised its quarterly dividend by 11%, to $0.50 a share.
Best Buy has fallen 16% over the past year, underperforming the SPDR S&P retail exchange-traded fund which has gained 1%. However, the retailer is up 13% this year.
Read more retail news from Markets Insider and Business Insider:
- Retailers are filing for bankruptcy at a staggering rate - and these 17 companies could be the next to default
- 'The Retail Doctor' says Macy's restructuring plan is not bold enough
- Warren Buffett explains how Costco is dominating in one crucial area
