People walk past a Best Buy store in Manhattan, New York on November 22, 2021.
Andrew Kelly | Reuters
Best Buy lowered its full-year sales outlook Tuesday as the company navigates a period of colder demand and prepares to welcome price-conscious holiday shoppers.
The consumer electronics retailer beat Wall Street’s quarterly profit expectations but missed revenue.
Best Buy said it now expects revenue between $43.1 billion and $43.7 billion for the fiscal year, down from its previous range of between $43.8 billion and $44.5 billion. of dollars. The retailer said it expects comparable sales to decline between 6% and 7.5%, down from its previous forecast of a decline of 4.5% to 6%.
It also lowered the upper range of its earnings forecast, saying it expects adjusted earnings per share to be between $6 and $6.30 from $6 to $6.40.
CEO Corie Barry said in a press release that Best Buy expects consumer electronics sales to decline this year. But amid an economic backdrop marked by high inflation and the Federal Reserve’s campaign to cut spending, she said consumer demand “has been even more uneven and difficult to predict.”
She said the retailer was ready for the holiday season and “prepared for a very bargain-focused customer with promotions and offers to suit all budgets”.
Here are the company’s results for the fiscal third quarter, compared to what Wall Street expected, based on a survey of analysts conducted by LSEG, formerly known as Refinitiv:
- Earnings per share: $1.29 adjusted versus $1.18 expected
- Revenue: $9.76 billion versus $9.90 billion expected
Best Buy, like home improvement retailers, is seeing demand moderate as it follows years of increased purchases of computer monitors, home theaters and appliances during the Covid pandemic. Barry previously told investors she expected this fiscal year to be “the lowest point in technology demand” before purchases resumed.
In the three months ended Oct. 28, Best Buy said its net income fell to $263 million, or $1.21 per share, from $277 million, or $1.22 per share, during the period of last year. Income fell compared to $10.59 billion a year earlier.
Comparable sales, an industry measure that includes sales online and at stores open at least 14 months, fell 6.9% year over year and 7.3% in the United States as shoppers bought fewer appliances, computers, home theaters and cell phones. The company said it has seen sales growth in the gaming sector.
The company’s online sales declined 9.3% in the United States.
Even though demand for merchandise has declined, Best Buy has generated higher profitability by making money through its annual membership program, selling products at more favorable margins, and reducing chain costs. ‘supply.
Best Buy shares closed at $68.11 on Monday. Year to date, the company’s shares have fallen about 15%, underperforming the S&P 500’s 18% gains during the same period.
This is breaking news. Please check again for updates.