Customers shop at Best Buy on August 24, 2021 in Chicago, Illinois. Best Buy reported a nearly 20% increase in second-quarter sales as consumers purchased electronic devices to adapt to lifestyle changes related to the ongoing pandemic.
Scott Olson | Getty Images
best buy It beat Wall Street estimates for the first quarter of the fiscal year even as customers faced high levels of inflation and the company ended last year’s spur-fueled Covid-19 run.
Shares were almost flat in pre-market trading after rising about 9% earlier.
Here’s what the retailer did in the three months to April 30 compared to what Wall Street was expecting, according to a survey of analysts by Refinitiv:
- Earnings per share: $1.57 adjusted vs. $1.61 expected
- Revenue: $10.65 billion vs. $10.41 billion forecast
Best Buy’s first-quarter net income fell to $341 million, or $1.49 per share, down from $595 million, or $2.32 per share, a year earlier. Excluding items, he earned an adjusted $1.61 per share.
Net sales fell to $10.41 billion from $11.64 billion a year earlier.
Best Buy’s same-store sales are down 8% from the same period last year, a better performance than the 8.6% decline analysts had expected, according to FactSet.
Investors search for retail profits Evidence for the health of the American consumer With Inflation is at its highest level in four decades. With Best Buy, some worry that the company will be particularly vulnerable to a downturn. It faced tough comparisons compared to a quarter ago of pandemic-driven demand for home theaters, computer monitors and kitchen appliances. This increased same-store sales by 37.3%.
Best Buy also told Wall Street at an investor day in March that sales will be lower after two years of very high demand. However, Chief Financial Officer Matt Bellonas said the company ultimately expected higher demand from pre-pandemic sales over the next several years.
Walmart And GoalInvestor fears increased last week. Both major retailers reported sales growth in the first quarter of the fiscal year, but they didn’t miss Wall Street earnings forecasts with higher fuel and freight costs and lower consumer demand at higher margins, and discretionary purchases. In particular, Target CEO Brian Cornell said customers skipped bulky items like TVs and kitchen appliances — merchandise that Best Buy also sells.
Retailers’ results helped led to a big sell-off on Wall Street last weeksending Best Buy stock to a 52-week low on Friday.
Those moderate expectations likely set the stage for Wall Street’s positive reaction to Best Buy on Tuesday morning, even as the retailer lowered its forecast and warned of troubled times ahead.
Best Buy said it now expects full-year revenue to range between $48.3 billion to $49.9 billion, compared with a previous forecast of $49.3 billion to $50.8 billion. It said same-store sales will fall between 3% and 6%, a sharper decline than the 1% to 4% drop it had previously forecast. It expects adjusted earnings per share in a range of $8.40 to $9.00, compared to a previous forecast of $8.85 to $9.15.
CEO Cory Barry said in a press release that the economic backdrop has worsened since the company introduced guidance on Investor Day.
“These trends continued into the second quarter, and as a result, we are revising our sales and profitability forecasts for the year,” she said.
On Monday, shares rose less than 1% to close at $72.59. The company’s stock is down about 29% so far this year and has underperformed the S&P 500 year-to-date by about 17%.
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