Best Buy announces $3 billion buyback plan, shares spike

Associated Press/Bebeto Matthews

In this Nov. 23, 2013, file photo, shoppers enter a Best Buy in New York.

• 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.

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