NEW YORK – Best Buy Co. Inc. (BBI), the top U.S. electronics chain,Thursday said it would record up to $33 million in charges to its fourth-quarter results to reflect changes in its lease accounting and for the effect of an allowance to cover customer returns.
The Minneapolis-based retailer also said it will begin expensing stock-based compensation in the first quarter of its new fiscal year ending in February 2006.
Best Buy also said it would cease to issue separate quarterly revenue and earnings statements, but instead, would combine them into one quarterly release, effective immediately.
December sales figures, however, would continue to be reported separately due to the seasonal importance of the month, Best Buy added.
According to Best Buy, earnings for the fourth quarter ended Feb. 26 would include a $50 million, or 15 cent per share, tax benefit related to its former Musicland (search) subsidiary.
However, the tax benefit, which would be included under discontinued operations, would be offset by a $23 million — or 7 cents a share — after-tax charge related to accounting adjustments to correct its lease accounting.
In addition, the company said it would also take a $10 million — or 3 cents a share — after-tax charge tied to the establishment of a sales return liability in the fourth-quarter.
According to Reuters Estimates, analysts had expected a quarterly profit of $1.55 a share.
On March 3, Best Buy warned that expanded promotions were likely to result in a profit at the low end of, or slightly below, its internal earnings per share target between $1.56 and $1.66.
A year earlier, it reported a fourth-quarter profit of $1.42 a share, according to Reuters Estimates. Best Buy shares were up 85 cents, or 1.6 percent, at $54.18 on the New York Stock Exchange.
Best Buy plans to release fourth-quarter results on Friday.
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