Best Buy scales back sales outlook as results top expectations

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A shopper pushes a cart with a TV in front of a Best Buy store in Chicago, Illinois, November 25, 2022.

Jim Vondruska | Reuters

Best Buy on Tuesday surpassed Wall Street’s quarterly sales expectations, but tempered its outlook for the rest of the year as it feels the lull of post-pandemic spending on kitchen appliances, computer monitors and other electronics.

CEO Corie Barry said the company still anticipates this year will be “the low point in tech demand,” before sales bounce back.

“Next year the consumer electronics industry should see stabilization and possibly growth driven by the natural upgrade and replacement cycles and the normalization of tech innovation,” she said in a news release.

Here’s how the company did for the fiscal second quarter that ended July 29, compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.22 adjusted vs. $1.06 expected
  • Revenue: $9.58 billion vs. $9.52 billion expected

Best Buy is seeing a reversion to pre-pandemic sales levels, as consumers return to more typical spending patterns and feel pressure on their budgets because of inflation. Similar to Home Depot and Lowe’s, Best Buy had outsized gains during Covid, fueled by big purchases that people don’t frequently repeat.

Over the past year, the consumer electronics retailer has felt the sting of inflation and consumers’ shift back to spending on experiences. The consumer electronics retailer has felt the sting of inflation and consumers’ shift back to spending on experiences over the past year. The company resumed share buybacks in late 2018. )

In the most recent three-month period, Best Buy’s net income fell to $274 million, or $1.25 per share, from $306 million, or $1.35 per share, a year earlier.

Net sales in the quarter dropped from $10.33 billion in the year-ago period.

Comparable sales, a key metric that includes sales online and at stores open at least 14 months, decreased 6.2% compared with the year ago period as customers bought fewer appliances, home theaters and mobile phones. The company reported that gaming systems were the main sales drivers for the quarter. E-commerce accounted for nearly a third of the retailer’s total revenue in the U.S., roughly in line with the year-ago proportion.

The retailer narrowed its full-year outlook. The retailer said that it expects revenues to range between $43.8 billion and $44.5 billion. It had originally predicted between $43.8 billion and $45.2 billion. It slightly increased its profit forecasts, though. It expects adjusted earnings of $6 to $6.40 per share instead of the previous guidance of $5.70 – $6.50.

Shares closed Monday at $74.07 bringing Best Buy’s market cap to $16.16 Billion. The company’s shares are down almost 8% so far this year. This is a developing news story. Please check back often for updates.