Televisions are found for sale at a Best Buy store in New York City.
Andrew Kelly | Reuters
Best Buy on Thursday topped Wall Street’s quarterly earnings expectations, but missed its sales estimates and reiterated expectations for weaker spending. Consumer electronics this year.
Shares rose more than 5% in premarket trading.
The retailer confirmed the shared outlook in March. It expects full-year revenue of between $43.8 billion and $45.2 billion, a decline from its most recent fiscal year, and a comparable sales decline of between 3% and 6%.
“In this environment, as customers continue to deal with high inflation and low consumer confidence due to a number of factors, customers are clearly feeling cautious and making transactional decisions,” CEO Cory Barry said in a news release.
Yet so far, Best Buy’s customer demographics and the percentage of premium products they buy have remained the same, he said.
Here’s how the company performed for the three months ended April 29, compared to what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.15 adjusted and $1.11 expected
- Revenue: $9.47 billion vs. $9.52 billion expected
Best Buy is the latest retailer to share an update on the American consumer. In the past week, a number of retailers, including Walmart, Target and Home Depot, have talked about more price-sensitive shoppers who aren’t willing to spend on big-ticket or discretionary items — especially compared to incentive-check-fueled years. Epidemic
As a consumer electronics retailer, Best Buy is vulnerable to recalls because many of the products it sells come with high price tags and are not replaced often.
Best Buy’s net income for the first quarter 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% from $10.65 billion a year earlier and below Wall Street’s expectations.
Comparable sales fell 10.1% in the quarter, in line with the decline expected by investors, according to StreetAccount.
The company is looking for other ways to make money when people aren’t buying more televisions, smartphones or home theater systems. Earlier this year, it signed a deal with Atrium Health, a North Carolina-based health-care organization, to sell the devices and handle installation for a program that allows patients to receive hospital care at home. It recently relaunched its membership program, My Best Buy, which charges a subscription fee and includes features such as technical support, extended returns and early access to hot products.
Best Buy laid off hundreds of store employees in April. The retailer declined to specify numbers, but said it is hiring workers in growing areas such as its membership program and health business.
The company’s workforce has shrunk over the years. As of the end of January, Best Buy had more than 90,000 employees in the United States and Canada. That’s down from nearly 125,000 workers at the start of 2020, according to the company’s financial filing.
Shares of Best Buy closed at $69.15 on Wednesday, bringing the company’s market value to $15.12 billion. So far this year, its stock is down about 14%, trailing the S&P 500’s 7% gains over the same period and retail-focused XRT’s 2% declines.