Best Buy

Best Buy reported billions in buybacks while hiking prices on appliances

Best Buy’s CFO said the company “flowed” the increased prices of appliances onto the consumers.  “Matt Bilunas, CFO, Best Buy: Yeah. Specifically, to appliances, that is one of the areas where it’s been pretty well noted that prices have gone up. And so we — and that’s probably an area where, in most cases, we’ve flowed those prices on to the consumer. So, those prices have — or sales prices have increased. That’s not to say that that happens in all circumstances and in a lot of categories where you still want to make sure you’re very competitive with your pricing. Even if costs do go up, you’re actually being thoughtful about serving them in the best way possible.“ (Best Buy Q3 2022 Earnings Call, 11/23/2021)

At the same time, Best Buy reported it would spend over $2.5 billion on share repurchases in 2021. “During the quarter, we returned a total of $577 million to shareholders through share repurchases of $405 million and dividends of $172 million.With a year-to-date share buyback spend of $1.7 billion, we still expect to spend more than $2.5 billion in share repurchases this year. Let me next share more color on our guidance for the fourth quarter, which remains very similar to the implied guidance we provided last quarter. We expect comparable sales growth to be in the range of down 2% to up 1% to last year, which is on top of our 12.6% comparable sales growth in the fourth quarter of last year. Like other companies, we continue to monitor the evolving impacts of the pandemic and supply chain pressures driven by global demand.” (Best Buy Q3 2022 Earnings Call, 11/23/2021)

In March 2022, Best Buy announced another $5 billion in stock buybacks. “The surge of activity has continued in March. Amazon.com Inc. said last week that it would buy back as much as $10 billion in shares, while Colgate-Palmolive Co.  and Best Buy Co.unveiled $5 billion plans.” (Wall Street Journal, 3/15/2022)