A Best Buy store stands outside the Brooklyn Mall on August 29, 2023 in New York City.
Spencer Pratt | Getty Images
Best Buy The company missed Wall Street’s quarterly sales forecasts on Thursday as demand for consumer electronics continued to be weak.
However, the retailer beat earnings per share estimates and maintained its full-year guidance. it expects Full-year revenue will be between $41.3 billion and $42.6 billion. That would be down from the recently ended fiscal year, when full-year revenue totaled $43.45 billion. The company said comparable sales would be flat to down 3%.
Best Buy is like this First fiscal quarter performance Compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted $1.20, expected $1.08
- income: $8.85 $1 billion vs. $8.96 billion expected
The company’s net profit rose slightly to $246 million, or $1.13 a share, in the three months ended May 4 from $244 million, or $1.11 a share, in the same period last year. After adjusting for one-time items, including restructuring charges, Best Buy reported earnings of $1.20 per share.
Net sales fell to $8.85 billion from $9.47 billion in the same period last year.
Best Buy’s sales have been sluggish as the company deals with the fallout from roughly two years of excess demand during the coronavirus pandemic. The retailer has been waiting for replacement cycles for laptops, kitchen appliances and more to normalize, as well as for the launch of new technology products to attract customers to its stores and website.
Additionally, Best Buy, like other retailers, has noticed less discretionary purchases as inflation causes consumers to manage higher costs.
Comparable sales, a measure that includes online sales and sales at stores open at least 14 months, fell 6.1% compared with the same period last year as customers purchased fewer appliances, home theaters, gaming equipment and mobile phones. On the other hand, the company said there was growth in its services and notebook categories.
With sales lagging, Best Buy is instead focusing on improving profits. It’s eyeing new businesses, including a subscription-based membership program. In late June, the company relaunched its three-tiered program, My Best Buy. The lowest level of the program is free, but the highest level costs $179.99 per year and includes benefits such as 24/7 technical support, up to two years of product protection, and a 20 percent discount on repairs.
At a news conference on Thursday, Chief Executive Coreie Barry said the company would continue to “manage our profitability while positioning ourselves for future growth.” However, she acknowledged a “challenging sales environment” in the consumer electronics category and sales were lower than expected.
The Minneapolis-based retailer has also cut back on spending. Earlier this year, Barry said the company would lay off employees and cut costs across the business. She did not specify the number of layoffs but said Best Buy would invest in areas that can drive growth, such as artificial intelligence.
As of early February, Best Buy had more than 85,000 employees. That number is down from nearly 125,000 employees at the start of 2020 and more than 90,000 employees at the start of 2023, according to the company’s financial filings.
The company also said in late February that it would close 10 to 15 stores this fiscal year after closing 24 stores in the previous fiscal year.
Best Buy on Thursday lowered its full-year capital spending forecast to $750 million from $800 million.
Best Buy shares closed at $71.90 on Wednesday, giving the company a market value of about $15 billion. The company’s shares were down about 8% year to date as of Wednesday’s close, lagging the S&P 500’s gain of about 10%.
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