Customers shop at a Best Buy store on August 24, 2021 in Chicago, Illinois.
Scott Olson | Getty Images
Best Buy on Thursday reported holiday-quarter earnings and revenue that topped Wall Street’s expectations, as waning demand for consumer electronics wasn’t as bad as feared.
Still, shares closed 2% lower on Thursday because the retailer warned of declining sales in the approaching 12 months.
For the approaching fiscal 12 months, the buyer electronics retailer said it expects revenue between $43.8 billion and $45.2 billion, a decline from its most up-to-date fiscal 12 months, and a same-store sales decline of between 3% and 6%. The corporate is expecting to feel the vast majority of that pressure throughout the first quarter after which level out within the second half of the fiscal 12 months.
“We’re preparing for one more down 12 months for the [consumer electronics] industry,” said CEO Corie Barry on a call with analysts.
Here’s how the corporate did for the quarter ending Jan. 28 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.61 vs. $2.11 expected
- Revenue: $14.74 billion vs. $14.72 billion expected
Best Buy was an enormous beneficiary of sales trends throughout the Covid pandemic as consumers bought computer monitors to work remotely, home theaters to pass the time and kitchen appliances to cook more. Its quarterly sales were down about 3% from the identical period before the pandemic when it reported $15.2 billion in revenue.
Its pandemic-era momentum has teed up difficult comparisons for the buyer electronics retailer, particularly as shoppers feel strained by greater grocery bills and other higher expenses fueled by inflation. Best Buy also sells a number of big-ticket items, akin to laptops and smartphones, purchases that customers may not make as incessantly or may postpone in the event that they’re stretched by other spending priorities.
Same-store sales decreased by 9.3% throughout the fourth quarter, barely higher than analysts’ expectations of 9.2%, in accordance with StreetAccount. For the total 12 months, same-store sales were down 9.9%, consistent with guidance the retailer issued in November that same-store sales would decline about 10%. The important thing metric, also called comparable sales, tracks sales online and at stores open at the very least 14 months.
Best Buy had joined other retailers in cutting its outlook this summer. It also cut an undisclosed variety of jobs across the country this summer.
Within the fiscal fourth quarter, Best Buy’s net income fell by 21% to $495 million, or $2.23 per share, from $626 million, or $2.62 per share, a 12 months earlier.
Best Buy is making a play to revive its storefront portfolio to bring the corporate’s margins back to pre-pandemic levels and “stay relevant in an increasingly digital age,” Barry said within the Thursday conference call. The revamp will cost the corporate $200 million in capital expenditures, a couple of quarter of the corporate’s projected $850 million capital expenditures for the 2024 fiscal 12 months.
As of Thursday’s close, Best Buy’s shares have risen nearly 3% up to now this 12 months, barely below the performance of the S&P 500, which increased 4% throughout the same period. Its shares closed at $80.79 on Thursday, bringing its market value to $17.88 billion.
