Customers shop at a Best Buy store on August 24, 2021 in Chicago, Illinois.
Scott Olson | Getty Images
Best Buy Thursday reported holiday season earnings and revenue that topped Wall Street expectations, as declining demand for consumer electronics was not as bad as feared.
However, shares were down about 4% in early trading as the retailer warned of declining sales in the coming year.
For the coming fiscal year, the consumer electronics retailer said it expects revenue between $43.8 billion and $45.2 billion, a decline from its most recent fiscal year, and a decline in sales in one shop between 3% and 6%. The company expects to feel most of that pressure in the first quarter and then level off in the second half of the fiscal year.
“We’re gearing up for another down year for the [consumer electronics] business,” CEO Corie Barry said on a call with analysts.
Here’s how the company did for the quarter ended Jan. 28 compared to Wall Street expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.61 vs. Expected $2.11
- Revenue: $14.74 billion vs $14.72 billion expected
Best Buy was a major beneficiary of retail trends during 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 same period before the pandemic when it reported $15.2 billion in revenue.
The move during the pandemic has made comparisons challenging for the consumer electronics retailer, especially as customers feel the pressure of larger grocery bills and other higher costs. stimulated by inflation. Best Buy also sells a lot of big-ticket items, like laptops and smartphones, purchases that customers don’t make often or might put off if they have stretched spending priorities. another.
Same-store sales fell 9.3% in the fourth quarter, slightly higher than analysts’ expectations of 9.2%, according to StreetAccount. For the full year, same-store sales were down 9.9%, in line with guidance the retailer issued in November that same-store sales would be down about 10%. The key metric, also known as comparable sales, tracks sales online and at stores open for at least 14 months.
Best Buy had joined other retailers in cutting its sights this summer. It also cut the number of jobs that were not announced across the country this summer.
In the fiscal fourth quarter, Best Buy’s net income fell 21% to $495 million, or $2.23 per share, from $626 million, or $2.62 per share, a year earlier.
Best Buy is making a play to revive its storefront portfolio to restore the company’s margins to pre-pandemic levels and “stay relevant in an increasingly digital age,” Barry said in a conference call Thursday. The renovation will cost the company $200 million in capital expenditures, about a quarter of the company’s $850 million projected capital expenditures for fiscal year 2024.
As of Wednesday’s close, Best Buy shares are up nearly 3% so far this year, in line with the performance of the S&P 500 over the same period. Its shares closed at $82.54 on Wednesday, bringing its market value to $18.26 billion.
