Televisions are on sale at Best Buy in New York City.
Andrew Kelly | Reuters
The best buy on Thursday was that Wall Street’s quarterly earnings beat expectations, but sales missed estimates and repeated expectations for weaker spending. This year’s consumer electronics.
Shares rose more than 5 percent in premarket trading.
The retailer confirmed the sentiment it shared in March. Full-year revenue of $43.8 billion to $45.2 billion is expected, down from last fiscal year, and a corresponding sales decline of between 3% and 6%.
“In this environment, clients are taking clear prudence and decisions as they continue to contend with high inflation and low consumer confidence,” CEO Cory Barry said in a news release.
So far, Best Buy’s customer demographics and the percentage of premium products they buy have remained the same, she said.
Here’s how the company did for the three months ended April 29, compared with Wall Street expectations, based on a survey of analysts by Refinitive:
- Earnings per share: $1.15 adjusted from $1.11 expected
- Revenue: $9.47 billion versus $9.52 billion expected
Best Buy is the latest retailer to share an update on the American consumer. Last week, several retailers, including Walmart, Target and Home Depot, spoke of more price-conscious shoppers unwilling to spend on big-ticket or in-demand items — especially when compared to the years of stimulative check fuel.
As a consumer electronics retailer, Best Buy is vulnerable to that rebound because many of the items it sells are higher-priced and less frequently replaced.
Best Buy’s first-quarter net income fell to $244 million, or $1.11 per share, from $341 million, or $1.49 per share, a year earlier.
Net sales for the quarter fell to $9.47 billion, down 11 percent from $10.65 billion a year earlier and falling short of Wall Street expectations.
Comparable sales fell 10.1% in the quarter, in line with the decline expected by investors, StreetAccount reported.
The company has looked for other ways to make money when people aren’t buying multiple televisions, smartphones or home theater systems. Earlier this year, the North Carolina-based health care system entered into an agreement with Atrium Health to sell and install equipment for a program that allows patients to receive hospital care at home. It recently relaunched its My Best Buy membership program, which charges a subscription fee and includes features like tech support, extended returns and access to fresh products.
Best Buy laid off hundreds of store employees in April. The retailer declined to divulge the number but said it will add staff in growth areas such as its membership program and health business.
The company’s workforce has declined over the years. At the end of January, Best Buy had more than 90,000 employees in the US and Canada. That’s down from about 125,000 workers at the start of 2020, according to the company’s financial filings.
Shares of Best Buy closed at $69.15 on Wednesday, giving the company a market cap of $15.12 billion. So far this year, the stock is down about 14%, trailing the S&P 500’s 7% gain and retail-focused XRT’s 2% decline over the same period.
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