A Best Buy store in Woodbridge, Virginia on May 21, 2024.
Nathan Howard | Bloomberg | Getty Images
Best buy On Tuesday, it cut its full-year sales forecast because it missed Wall Street’s quarterly earnings expectations and a fresh batch of iPhones and AI-powered laptops wasn’t enough to drive higher sales. .
The consumer electronics retailer said it now expects full-year revenue to be in the range of $41.1 billion to $41.5 billion, compared with prior guidance of $41.3 billion to $41.9 billion. It expects full-year comparable sales to decline between 2.5% and 3.5%, compared to its previous expectation of a 1.5% to 3% decline. Comparable sales include sales online and at stores open for at least 14 months.
Shares of Best Buy were down about 3 percent in premarket trading on Tuesday.
In the company’s earnings release, CEO Corey Berry said it saw “higher-than-expected demand.” “On a combination of ongoing macro uncertainty, consumers are waiting for deals and sales events, and disruption during elections, especially in non-essential categories,” it said.
But, he added, in the first weeks of the current quarter, consumer demand has picked up again as holiday sales pick up and election concerns ease.
“We continue to see a consumer who is looking for value and sales events, and who is willing to spend on high-value products when they need them or when new,” he said in the release. Compelling technology,” he said in the release. “In this way, we are balancing our optimism in both the industry and our unique positioning with a pragmatic approach to potentially address disparate consumer behavior.”
Here’s what the retailer reported for its fiscal third quarter, compared to Wall Street’s expectations, according to an LSEG survey of analysts:
- Earnings per share: $1.26 Adjusted Vs $1.29 expected.
- Income: $9.45 billion vs. $9.63 billion expected
During the three-month period ending November 2, Best Buy’s net income rose to $273 million, or $1.26 per share, from $263 million, or $1.21 per share. a year ago.
Net sales fell to $9.45 billion from $9.76 billion in the year-ago quarter.
After nearly two years of declining sales in the consumer electronics category, Best Buy is expecting a wave of shoppers to replace old devices and upgrade to newer, higher-tech devices. A mix of factors have dragged down the retailer’s sales, including increased purchases of items such as laptops, home theater systems and kitchen appliances during the Covid pandemic; A return to discretionary purchases as Americans spent more on food and other necessities due to inflation. and a return to spending on services, including travel and dining out.
Over the past few quarters, CEO Barry and CFO Matt Blounas have said they expect this year to be one that “increases stability in the industry.” Barry also talked about Best Buy’s expectation that new gadgets including Apple’s fresh iPad collection As well as artificial intelligence-powered laptops From Microsoftwill run the sale.
Yet the debut of these devices wasn’t enough to meaningfully lift Best Buy’s quarter. Comparable sales declined 2.9% across the business and 2.8% in the US.
Best Buy said weakness in appliances, home theaters and gaming led to a decline in comparable sales, but was partially offset by sales growth in computing, tablets and services categories. The company offers services, such as leaning into customers’ homes.
Digital sales were also soft, falling 1% year-over-year in the US.
As of Monday’s close, Best Buy’s shares are up about 19 percent so far this year. That’s lower than the S&P 500’s roughly 26% gain over the same period. Best Buy closed Monday at $93.03, giving it a market value of $19.98 billion.
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